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- Unreported Judgment
DISTRICT COURT OF QUEENSLAND
Lainor Investments Pty Ltd v SunBuster Solar Shades Pty Ltd  QDC 59
LAINOR INVESTMENTS PTY LTD
SUNBUSTER SOLAR SHADES PTY LTD
District Court, Brisbane
29 May 2020
4 and 5 February 2019
LANDLORD AND TENANT – TERMINATION OF THE TENANCY – PROVISIONS GIVING THE RIGHT TO TERMINATE IN NAMED CIRCUMSTANCES – OTHER CASES – where lease required that lessee not disturb occupants of adjacent premises – where lease prohibited lessee from displaying any signs without lessor’s consent – where lessee alleged to have verbally abused and threatened neighbouring lessees, cordoned off shared parking spaces and displayed signs without lessor’s consent – where lease provided that a breach of any term amounted to default – where lessor issued notice of breach of lease – where lessor issued notice to remedy – where lessor issued notice of termination of lease – whether lessee was in breach of lease – whether lessee had remedied breaches – whether lease validly terminated
LANDLORD AND TENANT – TERMINATION OF THE TENANCY – PROVISIONS GIVING THE RIGHT TO TERMINATE IN NAMED CIRCUMSTANCES – OTHER CASES – where lessor issued notice to remedy – whether notice to remedy invalidated for lacking specificity
LANDLORD AND TENANT – TERMINATION OF THE TENANCY – FORFEITURE – RELIEF AGAINST FORFEITURE – RELIEF UNDER STATUTE – where lessee sought relief against forfeiture pursuant to s 124 Property Law Act 1974 (Qld) – whether conduct of lessee disentitled lessee to relief – whether relief against forfeiture should be granted
Acts Interpretation Act 1954 (Qld), s 39
Property Law Act 1974 (Qld), s 124, s 132, s 136, s 137, s 347
Uniform Civil Procedure Rules 1999 (Qld), r 685
Ace Property Holdings Pty Ltd v Australian Postal Corp  QCA 55, cited
Batson v De Carvalho (1948) 48 SR (NSW) 417, cited
Expert Clothing Services and Sales Ltd v Hillgate House Ltd  2 All ER 998, cited
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, cited
Gerraty v McGavin (1914) 18 CLR 152, cited
Giacomi v Nashvying Pty Ltd and Others  QCA 454, cited
Nguyen v Valore  NSWSC 1364, cited
Shiloh Spinners Ltd v Harding  AC 691, cited
E Roberts for the applicant
B Wright for the respondent
HWL Ebsworth Lawyers for the applicant
Towns-Wilson Lawyers for the respondent
- The applicant, Lainor Investments Pty Ltd (Lainor), is the registered owner of Unit 1, 75-77 Lear Jet Drive, Caboolture in the State of Queensland (Premises).
- Lainor is also the owner of the two units adjacent to the Premises: Units 2 and 3, 75-77 Lear Jet Drive, Caboolture. Unit 2 was leased to Australian Motorcycles Accessories Clearance Warehouse Pty Ltd (AMA) and unit 3 was leased to TileConnect Pty Ltd (TileConnect). AMA had been a tenant since 2012 and TileConnect had been a tenant since 2010. The three units were part of the one complex situated at 75-77 Lear Jet Drive (Property) and shared a common car park.
- On 8 February 2017, Lainor and the respondent, SunBuster Solar Shades Pty Ltd (SunBuster), entered into a Commercial Tenancy Agreement (Lease), pursuant to which SunBuster leased the Premises for a term of three years, commencing on 1 April 2017, with two options to renew, each for a further three year period.
- By an originating application filed 10 October 2018, Lainor sought to recover possession of the premises from SunBuster on the basis that it had validly terminated the Lease as a result of numerous alleged un-remedied breaches.
- By application filed 12 November 2018, and amended with leave on the first day of the hearing, SunBuster sought a declaration that the Lease had not been terminated and remained valid and enforceable, or alternatively, that SunBuster be granted relief against forfeiture.
- After the hearing, the Court was notified that SunBuster did not purport to exercise its option under the Lease and had vacated the Premises.
- The subsequent notification stated that “A decision on the issues arising in respect of breach and termination (and on costs) remains necessary.”
- It was not suggested that there remains an issue as to outstanding rent payment for the period since the alleged termination.
- In circumstances where it may otherwise be unnecessary to determine the proceedings, r 685 of the Uniform Civil Procedure Rules 1999 (Qld) permits the court to “make the order the court considers just.” In order to determine costs, it will be necessary to decide whether the Lease had been validly terminated, and if so, whether the Court would have granted SunBuster relief against forfeiture. This judgment deals with these issues.
- The breaches alleged by Lainor arose from use of the common parking area, several verbal altercations between Sun Buster, the neighbouring tenants of the property and their customers, and signage installed by SunBuster without Lainor’s consent in the period since the date of commencement of the Lease and August 2018, the date of the expiry of the period given in the Notice to Remedy.
Provisions of the Lease
- The Lease contained several standard form conditions regarding restrictions on use of the Premises, default and forfeiture of the tenancy. The provisions of the Lease relevant to this matter are as follows:
“5.2 Restrictions on use
The Tenant must not:
- (1)disturb the occupants of adjacent premises;
- (2)display any signs without the Lessor’s written consent which must not be unreasonably withheld;
The Tenant defaults under this Tenancy if:
- (1)the rent or any money payable by the Tenant is unpaid for fourteen (14) days;
- (2)the Tenant breaches any other term of this Tenancy;
- (3)the Tenant assigns its property for the benefit of creditors; or
- (4)the Tenant becomes an externally-administered body corporate within the meaning of the Corporations Act 2001 (Cth).
9.2 Forfeiture of Tenancy
If the Tenant defaults and does not remedy the default when the Lessor requires it to do so, the Lessor may do any one or more of the following:
- (1)re-enter and take possession of the Premises;
- (2)by notice to the Tenant, terminate this Tenancy;
- (3)by notice to the Tenant, convert the unexpired portion of the Term into a tenancy from month to month;
- (4)exercise any of its other legal rights;
- (5)recover from the Tenant any loss suffered by the Lessor due to the Tenant’s default.”
- SunBuster’s business involved the sale of caravan shades and caravan accessories. Mr Steven van Schagen, as managing director of SunBuster, operated the business together with his wife, Evelyn van Schagen, as a co-director, and two employees. The business began operating from the Premises on 1 April 2017; though SunBuster were given permission to start moving into the Premises from February 2017.
- On 5 March 2018, Lainor’s solicitors sent a letter directed to ‘Mr van Schagen, Managing Director of SunBuster’, regarding alleged breaches of the Lease by SunBuster. The letter, later described as a ‘Letter of Notice of Breach’, stated that:
“We are instructed as follows:
- In or about April of 2017 [Mr Van Schagen] verbally abused and acted in a threatening manner toward neighbouring tenants and their customers on several occasions;
- Mr John Tunks, who is a director of [Lainor] spoke to [Mr Van Schagen] about this behaviour shortly after the incidents occurred, and requested [Mr Van Schagen] cease this behaviour because it was disturbing neighbouring tenants;
- [Mr Van Schagen] denied having engaged in this behaviour;
- Despite [Mr Van Schagen’s] denial, [Mr Van Schagen] then commenced to abuse and act in a threatening manner toward a customer of a neighbouring tenant in Mr Tunk’s presence;
- In or about January 2018, [Mr Van Schagen] engaged in further abusive and threatening conduct toward a neighbouring tenant, who was forced to seek the intervention of another person;
- Since occupying the premises in April 2017, [Mr Van Schagen] ha[s] cordoned off parking spaces in the car park area adjacent to [Sun Buster’s] leased factory site, and have displayed no parking signs in and around the car park spaces;
- Mr Tunks has advised [Mr Van Schagen] verbally on several occasions that [SunBuster] ha[s] no exclusive right of occupation of the relevant car park spaces, and has requested [Sun Buster] to remove the no parking signs and the material used to cordon off the car park spaces, but [SunBuster] ha[s] failed to do so.”
- The letter set out clauses 5.2, 9.1 and 9.2 of the Lease. It was stated that this letter constitutes formal notice of Lainor’s requirement to remedy the default for the purposes of clause 9.2 of the Lease by:
“(a) ceasing to disturb the occupants of adjacent premises in the manner described above or any other manner; and
(b) removing the no parking signs and cordoning from the adjacent car park spaces.”
- The letter concluded that if the breaches continue then “our client will have no option but to consider the remedies which are available under clause 9.2.”
- By letter dated 19 March 2018, the solicitors for SunBuster responded to the letter, denying that their client had breached any terms of the Lease. In the letter, Sun Buster’s solicitors stated that:
“Our client’s version of events differs from that of your client. Our client states that it was the neighbouring tenant who was abusive and threatening towards our client’s Mr Steven Schagen.
Our client has an issue with your client’s Mr John Tunks. The commercial tenancy agreement specifically indicates that the tenant did not want the lessor to enter at any time, without the giving of notice to the tenant.
It was an implied term that:
- our client would have quiet and peaceful enjoyment of the leased premises; and
- the parking bays directly front of his leased premises would be for the use of customers who would be towing caravans who attend at the leased premises.
Your client was well aware that out client’s business is in the caravan industry.
Your client mentioned the parking bays during the initial negotiations, when the lease agreement was negotiated, to convince our client to enter into the lease agreement of the leased premises.
Those parking bays were used by the previous tenant solely for the previous tenants’ business. The previous tenant stored its merchandise on the parking bays.
Even though it is not an issue at the moment, a client states that, when the lease agreement was initially discussed, your client informed our client that they can use the middle lawn area for display purposes. Our client informs us that your client is now denying that discussion.”
- A letter dated 4 July 2018 from the solicitors for Lainor to SunBuster enclosed a Form 7, Notice to Remedy Breach of Covenant (Notice to Remedy). The letter was sent by express post and addressed to SunBuster at the Premises. The Notice to Remedy provided that SunBuster had a reasonable time from the date of receipt to remedy the breaches. The letter nominated a period of 30 days from the date of the receipt of the letter as being a sufficient period of time within which to remedy the breaches.
- The Notice to Remedy restated in full the breaches alleged as set out in the letter dated 5 March 2018.
- Further, the Notice to Remedy specified:
“And in the period since the Lessee has received the Letter of Notice of Breach dated 5 March 2018, the Lessee has continued to breach the covenants [of the Lease] by the following course of conduct:
- On 18 April 2018, Steven Otto Van Schagen, the director the Lessee, verbally abused and acted in a threatening manner toward a neighbouring Lessee;
- The Lessee continues to cordon off parking spaces in the car park adjacent to the leased factory site, being an area located outside the Premises, and restricting use to the Council designated disabled parking facility in the car park at the Lessor’s complex;
- The Lessee continues to display “no parking” signs in and around the car park spaces which are located outside the Premises and which are not part of the Premises; and
- The Lessee has installed a sign to the wall of one of the units of the Lessor’s complex (not occupied by The Lessee), without the Lessor’s prior written consent.”
- Finally, the Notice to Remedy provided:
“The lessor, Lainor … gives you notice and requires you to remedy the aforementioned breaches of the covenants of the Lease by:
- Removing all cordoning, bollards, awnings and signs installed by you in any of the car park spaces in the Lessor’s car park;
- Ceasing to restrict the use of the Council designated disabled parking facility in the car park at the Lessor’s complex;
- Removing the sign installed on the walls of the Lessor’s complex (being a wall not within the Lessee’s Premises) and re-painting that work on that wall to the way it was prior to the Lessee’s installation of signage;
- Ceasing to disturb or verbally abuse or interfere with any Lessee or any customer of any Lessee; and
- Providing the Lessor with a written undertaking that you will not disturb and verbally abuse or interfere with any Lessee or any customer of any Lessee,
within a reasonable time of the date of receipt of this notice.”
- On 27 July 2018, Mr van Schagen of SunBuster sent by email a letter to Lainor’s solicitors, providing a detailed response to the allegations made:
“● Steven van Schagen was verbally brutalized by the tenant from Shop 3 at the entrance to Shop 1 which is leased from the Landlord. This is a private matter. We put on record that tenant Ivan, partner to the abuser, has profusely apologised to Mr Van Schagen’s wife for the language used and physical threats made. Mr van Schagen left the intolerable offensive scene and Ivan’s partner continued louder than ever. Mrs Van Schagen had to ask Ivan’s partner to leave under a barrage of abuse and threats.
- Bollards are standard requirement where danger is present. In this case these bollards are placed from time to time around a vehicle which is having repairs affected. This is basic Occupational Health and Safety requirement where such occasions arise at a business premises.
- Your notice of 5th March 2018 states that there are “NO PARKING” signs erected on the Landlord’s property. We say that there have never been such signs erected on the landlord’s property.
- We have checked with the MBRC [Moreton Bay Regional Council]. Council confirm that they have no interest in any Disability Parking space within Private Property.
- The awning has been erected after discussion and direction with the landlord in September 2017.
- Your client’s retraction dated 3rd May 2017 of benefits granted previously, is rejected.
- Your Client’s granted permission and signage has been placed on the wall space which faces 75-77 Lear Jet Drive. This wall is on the neighbouring property. It must be noted that other advertising from another retailer appears there also and has done so for many years. Explicit discussions were conducted with the landlord prior to signing of the lease to which the signage comply.”
- The letter further stated:
“Whilst we have done our best to address your concerns we feel your notice lack particulars.
I hope this answers your concerns and confirm that you can clearly see that Sunbuster Solar Shades are complying with all reasonable demands made on them by the Landlord.
We are desirous to resolve any issues your client might have. Our Mr van Schagen has medical issues and does not need to stress of your client’s interference. We would appreciate the undisturbed enjoyment and use of the leased premises. We always pay our rent on time.”
- The letter then detailed various maintenance items which Lainor, as the landlord, needed to complete and made particular reference to an issue in relation to the location of the disabled parking bay; describing its location as a health and safety risk and making suggestions for its relocation. The email enclosed a number of photographs taken at the Premises.
- On 3 August 2018, Lainor’s solicitors sent an email to SunBuster, noting that none of the items 1 to 5 of the Notice to Remedy had been dealt with and commenting that the photos provided indicate that signage has not been removed and that the tenant is still continuing to block the disabled car park.
- On 5 August 2018, SunBuster issued a letter to Lainor’s solicitors requesting “specific details” and stated it was “difficult to ascertain unequivocally your complaints and requirements and how you view the alleged breaches.” SunBuster stated:
“I honestly believe that I have conformed to the Legal requirements as set out in the lease and without your specifics I am left wondering what your client’s accusations really are.
As best I can and without acuity, I am responding to what you are alleging exactly: -
Alleged breach 1, not pertaining to leased area as detailed in contract;
Alleged breach 2, ditto;
Alleged breach 3, have permission in writing;
Alleged breach 4, not pertaining to leased area as detailed in contract and/or presumed leased areas of the complainant;
Alleged breach 5, I refer you to clause 5.2(1).”
- On 9 August 2018, Lainor’s solicitors wrote an email addressed to “[email protected]”, detailing each of the four alleged breaches contained in the Notice to Remedy Breach. The email stated:
- The Tenant is in breach of clause 5.2(2) of the Lease, being the obligation not to display any signs without the Lessor’s consent.
- The Lessor owns and operates a car park within its complex.
- The Lessor licences its car park, to be used in common with tenants of the Lessor’s complex strictly in accordance with rules set by the Lessor.
- The Tenant has installed signs in the Lessor’s car park, which indicates that several car parks are for the use of the Tenant’s customers.
- The Tenant does not have the lessor’s consent to install signs of any kind in its car park.
- The Lessor has not granted consent to any such signage, and has no obligation to grant any such right for signage to its car park spaces.
- The Lessor has demanded that the Tenant remove the signage from the car park, and has provided a reasonable period of time to do so (being 30 days).
- The Tenant has provided photographic evidence to the lessor on 3 August 2018 that show that the car park signage installed by the Tenant has not been removed.
- The car park is in an area licensed by the Lessor to its tenants in its Complex, to be used in common with tenants of our client’s premises strictly in accordance with rules set by the Lessor.
- The Tenant has restricted access to our client’s designated disabled car park spaces, in breach of the town planning regulationsfor the Complex.
- The Tenant does not have permission to restrict access to the disabled car park spaces, or to use these spaces for its business.
- The Lessor has demanded that you cease restricting access to designated disabled car park spaces and has provided a reasonable period of time to do so (being 30 days).
- The Tenant has responded providing photographs evidencing that the Tenant is continuing to restrict access to the designated disabled car parking spaces.
The Tenant claims that it has written permission to install a sign on the wall. Please provide a copy of this written permission.
- The Tenant is in breach of clause 5.2(1) of the Lease, being the obligation not to disturb the occupants of adjacent premises.
- The Lessor has provide[d] the Tenant with details of course of conduct by the Tenant, where the Tenant has abused and behaved in a threatening manner towards occupants of adjacent premises and their customers.
- The Tenant has been required to cease disturbing the adjacent lessees and customers of the adjacent premises and to provide a written undertaking to the Lessor that it will not disturb and verbally abuse or interfere to any customer of the lessee.
- The Lessor has allowed the Tenant a reasonable period of time to apply the written undertaking (being 30 days).
- The Tenant has failed to provide the written undertaking.”
- On 16 August 2018, a notice of termination of Commercial Tenancy Agreement (Notice of Termination) was issued by Lainor’s solicitors to SunBuster and sent by express post to the Premises. The Notice of Termination required that SunBuster vacate the Premises within 14 days’ of the issue of the Notice of Termination.
- Email exchanges occurred between “Steve” and Lainor’s solicitors on 20 and 21 August 2018. The emails raise maintenance issues. In the email of 21 August 2018, the solicitors noted that, ‘in any event, the lease has now been terminated and is at an end.”
- On 27 August 2018, SunBuster sent a letter to Lainor’s solicitors in which reference was made to maintenance issues and also to the breach allegations. In terms of the breach allegations, the letter stated that “the matters complained of are frivolous and/or have been rectified.” The letter provided a detailed response to each allegation and said, “we are quite prepared to enter into further discussions with you and/or your client by way of mediation or otherwise, to sort out the trivial issues.” It was stated, “It appears to us that the lessor is desirous to exit from our leasing contract and is now looking for excuses to do so.”
- By further email dated 4 September 2018, Mr Van Schagen informed the solicitors for Lainor that they had been informed by their bank that their nominated account for the payment of their monthly rentals had returned their rental payment for September 2018. The email asked for account details and stated that they were ready, willing and able to pay and that they did not accept the attempt to terminate the Lease agreement based on the alleged breaches. The email concluded:
“It is our intention to continue to lease the premises; to hold you to our lease agreement for the full term; and to inform you in due course if we intend to exercise the option for the renewal of the lease.”
- In response, by email on 4 September 2018, Lainor’s solicitors stated that their client had terminated the Lease and “as you refuse to vacate the property we have been instructed to apply to court for orders securing vacant possession of the leased premises.”
- At the hearing, in support of its application, Lainor relied on affidavits of Stanley John Tunks (director of Lainor), Nicole Warner (director of AMA), Anthony Thompson (co-director of TileConnect) and Ivan Roberts (co-director of TileConnect). SunBuster relied on affidavits of Steven van Schagen (co-director of Sun Buster) and his wife and co-director, Evelyn van Schagen.
- At the hearing, all deponents of affidavits which were sought to be relied upon were cross-examined.
- The evidence of Mr Tunks and Mr van Schagen was directed to the pre-Lease negotiations, the use of the common car parking area and verbal altercations with other tenants and customers.
- The other tenants also gave evidence of verbal altercations with Mr van Schagen.
- Mr Tunks was a considered witness who made appropriate concessions, even if against his self-interest.
- Mr van Schagen was argumentative in the witness box and during the course of his evidence showed how difficult he would have been as a tenant. The best example is the evidence he gave in relation to his parking in a vehicle of a customer of AMA. He denied that he deliberately parked him in, saying he parked his car at the back of the customer so he could unload. He denied that the customer couldn’t drive out, saying that the customer chose not to drive out because he wasn’t in his vehicle. Later he said the customer was only not able to drive out because he (Mr Van Schagen) was on an overseas phone call. Eventually, he admitted that he parked across the back of him and the customer could not drive out as the customer would hit him, but he said that the customer could leave if he came and asked. He admitted that when the customer was ready to leave the customer wasn’t able to do so because he was on an overseas phone call, which he said lasted 30 minutes.
- Mr van Schagen’s evidence as to the altercation which then followed between himself, the customer of AMA and Ms Warner (a director of AMA) is a telling example of Mr van Schagen’s lack of credibility. The version offered by Mr van Schagen differed markedly from a video taken by Ms Warner on her mobile phone of the incident. Mr van Schagen’s response in the end was that the recordings had been doctored. No evidence was offered in relation to that assertion and I do not accept it.
- Another incident is the one involving Mr Thompson. Mr van Schagen’s evidence was at odds with an email sent by Mr Thompson to the landlord (Mr Tunks) on the day of the incident giving an account of the incident. Importantly, the email contained admissions against interest by Mr Thompson and was written whilst it was fresh in his mind. Having regard to the evidence given by Mr Thompson, and the view formed as to his honesty as a witness, I accept the email sent by Mr Thompson contained a correct account of the incident on that day.
- In assessing the evidence generally, I found the evidence of the other tenants more reliable than the evidence of Mr van Schagen or his wife. In giving their evidence, the other tenants were doing their best to recollect the events in a truthful manner and without exaggeration. They were willing to make appropriate concessions, even if against their self-interest.
- In contrast, I found Mr van Schagen to be an unreliable witness, who had no insight into his own character and was prone to exaggeration. In giving his evidence, he appeared oblivious, or in denial, as to the extreme aggression in his behaviour and was always very ready to caste blame on others. Where Mr van Schagen’s account differs to that of the other witnesses, I accept the account as given by the other witnesses.
Notice to Remedy
- In bringing its application to recover possession of the Premises, Lainor relies on the five matters contained in the Notice to Remedy. It is convenient to make findings in relation to these matters before dealing with the submissions made on behalf of SunBuster about the notices.
Item 1 – Bollards, awning and car park signs
- The Lease executed by the parties did not contain any reference to car parking spaces and the map attached defining the Premises did not include any of the car parking area. SunBuster maintained that there was an agreement that SunBuster would have an exclusive right of access to certain designated car parking spaces, being the car parking spaces in front of its Premises. SunBuster maintained that the parking sign which was on the wall of the neighbouring property was not on the lessor’s premises, so the lessor’s consent was not necessary, and in any event, the sign simply indicated where SunBuster’s customers could park.
- There were no pleadings and SunBuster did not contend that the agreement had any legal effect. SunBuster contented itself with simply stating that there were conversations prior to the entry into the Lease on this subject matter.
- The evidence of Mr Tunks was that he met with Mr Van Schagen on two occasions prior to the signing of the Lease. His evidence was that, at the end of the second meeting, the Lease was executed by both he and Mr van Schagen and their wives, as their fellow directors. All four were present for the whole of the second meeting.
- Mr Tunks’ evidence was that both meetings with Mr van Schagen took place at the current premises being leased by SunBuster which were nearby at Cessna Drive, Caboolture. Mr van Schagen and Mr Tunks were the only people present for the first meeting.
- In between the first and second meetings, there was email correspondence between the agent appointed by Lainor and Mr van Schagen. It is not disputed that Mr van Schagen had inspected the Premises with the agent.
- At the second meeting, Mr Tunks said that he recalled filling in details in the reference schedule of a blank REIQ Commercial Tenancy Agreement. Mr Tunks said that he could recall that as they were completing the schedule, they had discussed a number of terms. He said that he could recall that resulted in some amendments which were made in hand and initialled by both himself and Mr van Schagen.
- Mr Tunks said he recalled, amongst other things, Mr van Schagen had raised a question about allocated individual parking spaces to each tenant. Mr Tunks said that he told Mr van Schagen that he would not do that and that “the parking spaces at the Property were common property for shared use by the Tenants.” In oral evidence, Mr Tunks said that in his experience such an arrangement would be difficult or impossible to maintain. He said that he had said it was likely to result in tenants complaining to other tenants’ customers that they were parking in the wrong place or that tenants would start arguing with each other.
- Mr Tunks also said he could recall Mr van Schagen raising a question about using the grassed area of the Property for display purposes. He said Mr van Schagen said he was in the process of manufacturing a particular type of caravan that he would wish to be able to display in that area. Mr Tunks said that he had told Mr van Schagen he would consider any such request if received in writing and subject to consultation with the other tenants.
- In giving oral evidence, Mr Tunks said that he could recall that Mr van Schagen was not impressed with his response as to the car parking and display area but accepted it as he wanted the lease.
- Mr Tunks denied at any time to having agreed to provide to SunBuster dedicated parking spaces or a dedicated access route to their leased Premises. Mr Tunks’ view was that the common area (car parking spaces, driveway and landscaping) was to be utilised by all three tenancies, each of which he said from time to time had large vehicles doing deliveries and collections.
- Further, Mr Tunks did not agree that at any time he had given any indication to Mr van Schagen that they would have exclusive use of the driveway in front of his Premises or the car parking spaces and nor that the disabled parking space would be moved.
- Mr Tunks said, under cross examination, that he never represented to Mr van Schagen that any of the terms of the Lease would be other than as stated in the written lease.
- The evidence of Mr Van Schagen was that he had asked Mr Tunks, during the lease negotiations, if he could have particular allocated car spots in the common parking area. Mr Van Schagen said it was an extremely important issue to him. Mr van Schagen said his business required allocated car spots. He referred to his customer’s rigs being up to 60ft long and his need for dedicated passage, parking and access to his building.
- Mr van Schagen said he had also asked him about the use of the west wall of the Property for a large advertising sign. He said that Mr Tunks had said he had no objection but that he would have to obtain permission with the building owner of the adjoining premises. He said that Mr Tunks had said that if permission was not obtained then he could place a large billboard within the car parking area.
- Mr van Schagen said that he also asked for a dedicated caravan display space. He said Mr Tunks agreed to give him exclusive use of all the spaces in front of his building and the central grassed area. He said Mr Tunks said he would speak to the other tenants and allocate space as appropriate.
- Mr van Schagen said they also discussed the need to move the disabled car parking. He said he explained that it was very inconvenient in its current location. In his affidavit evidence, Mr van Schagen did not specify where these discussions occurred and it is unclear as to whether his evidence is that those discussions occurred before execution of the Lease.
- Mr van Schagen accepted that the first draft lease provided to him by Mr Tunks did not contain any reference to allocated car parking spots. Despite that, Mr van Schagen maintained that during negotiations he was told by Mr Tunks that he could have exclusive use of all the spaces in front of the building and that he could have use of the grassed area as a caravan display area.
- In signing the Lease absent any reference to dedicated car parking spots, Mr van Schagen said that Mr Tunks had said to him, “You will have to trust me on this. I will consult with the other tenants and ensure your sole rights to the space is discussed.”
- Mr van Schagen said that he considered agreement had been reached in relation to the dedicated car parking spaces, but had asked that it be confirmed in writing. He accepted no written confirmation was received in relation to the car parking allocation but still considered that Mr Tunks had given him exclusivity to those car parking areas.
- For the reasons previously explained, the evidence of Mr Tunks is preferred to the evidence of Mr van Schagen. I find there was no oral agreement allocating to SunBuster any designated car parking spaces. Given that finding, it is unnecessary to deal with how any agreement could sit with the signed Lease.
- Mr Tunks’ evidence was that for a period of just over a year, he had observed parking spaces being obstructed at the Property by bollards, an awning and Sun Buster’s van parked across several parking spaces. His evidence referred to SunBuster having for a time placed in the car parking area bollards, which were joined by chains with a sign stating, “PLEASE KEEP CLEAR CARAVAN PARKING”.
- His evidence as to the activities of Mr van Schagen in the common parking area was supported by the evidence of the other tenants, Ms Warner, as a director of AMA and Mr Thompson and Mr Roberts, as directors of TileConnect.
- Mr van Schagen denied that he had any disagreements with customers regarding car parking, and said that he had never told any other persons parking at the Property that they could not park in particular spots.
- After providing this response, in cross examination Mr van Schagen was asked whether he had ever had an incident at other premises. Mr Van Schagen admitted to “jacking up” a car with bricks, when that car had been parked out the front the premises previously leased by SunBuster. Mr van Schagen maintained the car had been parked there despite a sign and, when questioned, said that he believed it was an appropriate response.
- In being questioned further about incidents with other customers, Mr van Schagen responded by saying, “I don’t know what you mean by the word ‘customer’.” He was referred to customers of your business, customers of any other tenants, any other person parked in those premises and Mr van Schagen responded by saying he had only had an issue with the company next door. It was only at that point that Mr van Schagen admitted to having a dispute but admitted to it only having occurred “once”.
- Mr van Schagen’s initial answer and subsequent limited admission were simply not true. Accepting the evidence given by the other tenants, it is accepted that on a number of occasions Mr van Schagen had told other persons that they could not park in particular spots.
- It is accepted that following the issue of the Notice to Remedy, the use of bollards to block off certain parking bays had ceased and the awning over the disabled car parking space had been removed.
- In or about April 2017, at or around the time of the commencement of the Lease, SunBuster had painted on the wall of the neighbouring property, a large advertising sign “Sun Buster ‘Putting Cool into happy hour’ Caravan Awning Accessories” (Advertising sign) and a parking sign, “Sun Buster Customer Parking Only” (Parking sign). After receipt of the letter in March 2018, the Parking sign was amended to read, “Sun Buster Customer Parking here”.
- In giving evidence, Mr Tunks explained his objection to the Parking sign on the basis that the Lease did not provide for it, he had never agreed nor represented to Mr van Schagen that any of the terms of the lease would be other than as stated in the written lease, and in any event, he did not approve of segregated parking for the individual tenants of the Property.
- SunBuster maintained that the Parking sign, on the wall of the neighbouring property, was not on the lessor’s premises, so the lessor’s consent was not necessary, and in any event, the sign simply indicated where SunBuster’s customers could park.
- It was submitted on behalf of SunBuster that the amended Parking sign did not indicate exclusivity; rather it was simply indicating to the customers of SunBuster to park there. In cross examination, Mr van Schagen said that the reason he put the Parking sign up was to indicate to his customers that they should not park elsewhere because that would disturb the other tenants. He said Mr Thompson had complained to him about Sun Buster’s customers parking in front of his business. Later, in cross examination, Mr van Schagen accepted that the Parking sign indicated that he wanted his customers and, not other tenants’ customers, to park in that spot.
- Relevantly, Mr Van Schagen said that “I was certainly of the opinion and even today I was of the opinion that Mr Tunks had given me exclusivity to those car parking areas…through discussions”.
- In cross examination, Mr van Schagen nevertheless maintained that he did not know that the Parking sign was a source of complaint.
- It is not accepted that Mr van Schagen was not aware of the complaint about the Parking sign, nor is it accepted that he did not intend by that sign to suggest that other customers not park there. The clear intention of the sign was to indicate that the parking area in front of his Premises was for the exclusive use of Sun Buster’s customers.
- Clearly, despite the fact that the Parking sign was on the neighbouring property it clearly was designed to and did affect car parking in the complex, and accordingly disturbed the other tenants.
Item 2 – Disabled parking space
- In a letter from SunBuster dated 27 August 2018 to Lainor’s solicitors, it was said,
“To continue with the disabled Parking breach is ridiculous to say the least. The parking space is available without restriction. We believe the placement of the disabled parking spot is unwise as it is next to a glass window. This matter is subject to application [t]o the Landlord for moving elsewhere.”
- The letter included a photograph of the vehicle driven by Mr van Schagen in the disabled space. The sending of the photograph of his vehicle in the disabled car parking space suggests that the use of the disabled car parking area by SunBuster was a habit.
- In his affidavit evidence, Mr van Schagen said that he had raised the location of the disabled parking with Mr Tunks at the time of negotiating the Lease. He said that Mr Tunks had agreed he would attend to re-locating the disabled parking bay as part of the upgrade of the building for use by clean industry.
- In giving his evidence, Mr Tunks said that his particular concern in relation to the disabled car parking area was the placement by SunBuster of bollards and an awning over the disabled car parking bay, which prevented anybody parking in the bay. Mr Tunks accepted that, subsequent to receipt of the Notice to Remedy, the bollards and awning had been removed.
- In terms of the location of the disabled parking bay, Mr Tunks said that the first time he had any knowledge of any issue regarding the location of the disabled car parking was in the letter of 27 July 2018, in response to the Notice to Remedy. When asked as to why he had not investigated the complaint, Mr Tunks said:
“…the reason, probably, that I haven’t looked at it is that I’ve had so many complaints which have turned out to be totally fictitious, that I have a limited time-span [to] apply to all of these complaints.”
- The desirability of the re-location of the disabled car parking spot is a separate issue. Until any re-location was agreed, following the requisite period nominated in the Notice to Remedy, any continued obstruction by SunBuster to others use of the disabled car parking would amount to a disturbance of the occupants of adjacent premises.
- It is clear from the evidence of Mr van Schagen that he continued to park in the disabled car parking space. Mr Tunks said he was not concerned about Mr van Schagen parking his vehicle in the disabled parking area but that his concern was about the presence of bollards and an awning in the area. On one view that evidence would support the contention that the complaint relating to the space was trivial. It is, however, an odd response to the complaint for Mr van Schagen to send a photograph of Mr van Schagen’s vehicle in the disabled car parking space; suggesting his intention was to continue to restrict the use by others of the disabled car park; albeit by the presence of a vehicle rather than by the use of bollards and an awning. The inference is inescapable that by this act, SunBuster had failed to remedy the complaint.
Item 3 – Sign on TileConnect
- In early 2018, SunBuster painted on the wall of the premises leased to TileConnect the SunBuster logo. Mr van Schagen maintained that he had obtained consent for the SunBuster sign from TileConnect. He said Mr Roberts had given his consent. He said it “wasn’t my responsibility to get approval” from Mr Tunks. He said it was the responsibility of the tenants of that area.
- The directors of TileConnect, Mr Roberts and Mr Thompson, both gave evidence. Their evidence, which I accept, is that their consent was not sought. Mr Roberts had said he could recall having a discussion with Mr Van Schagen, where Mr Van Schagen had asked him whether he had any interest in putting signage on the back wall of the building. Mr Roberts had said to Mr Van Schagen that TileConnect had no such interest. Mr Roberts said that Mr van Schagen did not ask whether SunBuster could put up a sign.
- Despite not having been asked, Mr Roberts and Mr Thompson, both gave evidence that they had no issue with the sign being on the wall.
- Mr Tunks gave evidence that his consent was never sought in relation to the erection of that sign. In cross examination, he conceded that he had no continuing issue in relation to the existence of the SunBuster sign.
- The fact remains, however, that the Lease provided that a tenant must not display any signs without the Lessor’s consent and that Mr van Schagen had not sought Lainor’s consent. The result is that there was a technical breach which had not been remedied.
Item 4 – Disturbing, verbally abusing or interfering with other tenants and customers
- The directors of the neighbouring tenants gave evidence of various interactions with Mr van Schagen in which Mr van Schagen raised complaints about the use of the common parking area and expressed his opinion that each of the three tenants should have designated parking spaces. In their evidence, they refer to customers having been approached for parking in the wrong place.
Altercations with AMA
- In the evidence, there was reference to two particular incidents involving a director of AMA and a conversation between Mr van Schagen and an employee of AMA.
Incident in April or May 2017
- In his affidavit, Mr Tunks described having received a phone call from Mr Warner, a director of AMA, in or around April or May 2017. In response to the call, Mr Tunks said he had attended at SunBuster’s Premises to discuss with Mr van Schagen the complaint made by Mr Warner. Mr Tunks said that Mr van Schagen admitted to asking the customer to move the vehicle, saying to them that they had parked in the wrong place. Mr Tunks said that when he questioned Mr van Schagen, asking him why the customer would have made a complaint, Mr van Schagen jumped out of his chair, taking several steps towards Mr Tunks, pointing his finger and shouting, “Are you calling me a liar?”
- Mr Tunks said that when he left the Premises to speak to Mr Warner, Mr van Scahgen followed and started verbally abusing Mr Warner. Mr Tunk’s evidence was that he then left AMA and was followed into the car park by Mr van Schagen. In cross- examination, Mr Tunks in denying that he told Mr van Schagen that he would evict him, admitted to saying, “Steve, that’s enough. I can’t stand a bar of you. I’m going home.”
- In cross examination, Mr van Schagen denied ever having discussions with Mr Warner about such matters, saying that he had never spoken to or met Mr Warner, and therefore that any allegation of a dispute was untrue. Mr Van Schagen denied he had ever had a conversation with Mr Tunks about a complaint made by Mr Warner.
- I accept the evidence of Mr Tunks that the incident occurred as he states. It is consistent with the behaviour of Mr van Schagen that occurred in the witness box.
Incident in January 2018
- Ms Warner, a director of AMA, gave evidence in relation to a particular altercation with Mr Van Schagen on 19 January 2018. Ms Warner recorded the altercation on her mobile phone. She did not tell Mr van Schagen she was recording the incident.
- Mr van Schagen parked in one of AMA’s customers. The customer’s vehicle was parked in the bay next to the disabled car parking space. The customer was disabled.
- In cross examination, Mr van Schagen insisted that he had not deliberately parked the customer in, saying that the customer was not in the car when he had parked there and insisting that the customer could have left if he had come and asked.
- Mr van Schagen maintained that he had told the staff at AMA he had parked behind the customer, the staff checked with the customer and he says that the customer had refused this offer. At some point Mr van Schagen went upstairs to take an international phone call.
- One concerning aspect of his behaviour that day was his refusal to end the phone call to allow the customer to leave, notwithstanding having been told by his wife of the issue and in circumstances where he accepted the call lasted about 30 minutes.
- Mr van Schagen said that when he went downstairs, he spoke to the driver. He said the driver was “totally incoherent, eyes glazed and slurring words.” In cross examination, he referred to speaking to the person “who was behind the wheel, who was smoking pot.” He denied that the customer was irate. He denied becoming involved in a verbal altercation with any other person from the car.
- Mr van Schagen described Ms Warner as being “hysterical”. When subsequently asked by Ms Warner as to why he was so hostile, Mr van Schagen responded: “I’m not hostile, but you certainly showed your violent side, Ms Motorcycle Missy.”
- During re-examination, Mr Van Schagen was referred to the video evidence, and said that the video footage put before the court and played at the hearing had been ‘cut’ and therefore the videos did not cover the entirety of the incident; though there was no further evidence given in this regard and it was not put to Ms Warner.
- It is clear that, upon coming down from his office, Mr van Schagen had entered into a verbal dispute with the customer and/or driver of the vehicle. Ms Warner had then come from AMA premises and intervened, as the altercation involved a customer of AMA. After the vehicle had been allowed to leave, Mr van Schagen proceeded to verbally abuse Ms Warner.
- It is clear from the evidence of Ms Warner, her video and his own evidence that Mr van Schagen was the aggressor.
Conversation with employee of AMA
- Mr Van Schagen admitted to telling an employee of AMA, Mr Peter Bull, that he might not have a job for much longer as AMA was likely to be closed down. Mr van Schagen accepted that he had told Mr Bull that AMA was operating illegally in a building which was not classified for their possession.
Altercations with TileConnect
- In his affidavit evidence, Mr Thompson gave more detailed evidence of two particular incidents involving Mr van Schagen. Mr Roberts, as a co-director, was present for one incident and gave evidence regarding that incident.
Access to manhole in TileConnect’s premises
- In his affidavit, Mr Thompson detailed an incident involving tradesmen employed by SunBuster walking into TileConnect in order to gain access to the roof cavity during business hours. Access was needed to be gained through the manhole in TileConnect’s premises in order to fix the air conditioning unit in SunBuster’s Premises.
- Mr Thompson said Mr van Schagen had not given him any prior notice and the presence of the tradesmen and their ladders was disrupting to his business. Mr Thompson said that he subsequently told Mr van Schagen that he should ask permission. He said, Mr van Schagen responded to the effect that it was not his problem, that he did not need to seek permission and that it would be inconvenient for tradesmen to attend outside of TileConnect’s business hours.
- Mr van Schagen accepted that he had not asked TileConnect for permission to enter their premises. He did not dispute that Mr Thompson had spoken to him subsequently. Mr van Schagen maintained that he could not have informed TileConnect of the exact times of arrival of the tradesmen as he did not know when they were coming and that the tradesmen “just turned up”.
- Mr van Schagen stood by his position, as stated in his affidavit, that TileConnect had no reason to comment or become involved in the maintenance work being conducted. He said that TileConnect were aware of the location of the manhole and that if they had been concerned about disturbance and disruption, they should have had Lainor install it elsewhere.
Incident on 18 April 2018
- Mr Thompson referred to another incident which occurred in the common car park, early on the morning of 18 April 2018. Following the incident, he had sent an email to Mr Tunks describing the incident.
- At the time of the incident, Mr Thompson was on a forklift and was being assisted by his business partner in loading a pallet of tiles.
- The email referred to the fact that both he and Mr Roberts were in the car park using the forklift to load a pallet of tiles when Mr van Schagen approached them, again complaining about the car parking situation at the Property.
- Mr Thompson said he made some remarks to Mr van Schagen and he became very agitated. The email said Mr van Schagen had said to Mr Thompson, “...you’re a wanker, you cockhead.” Mr Thompson said that he told Steve that his “usual aggressive bullying behaviour may work with others (our neighbours included), it will never work with me.”
- Mr Thompson admits in the email that he then reciprocated with equivalent language. He also admitted to apologising to Mrs van Schagen for the display of language outside her place of work. In the email, he said that Evelyn accepted his apology “acknowledging that it is a regular event with Steve!”
- In the email, Mr Thompson said that he had told Mr van Schagen that under no circumstances was he to enter his business premises, that he was not welcome and, that if need be, he would get a restraining order.
- In cross examination, Mr Thompson denied, as was asserted by Mr and Mrs van Schagen, that he had entered SunBuster’s Premises on that occasion. He also denied when it was put to him that he had said he would assault or punch Mr Van Schagen. Mr Thompson was not otherwise challenged in relation to the incident as described in his email.
- Mr Thompson is supported in his recollection of the incident by the evidence of his business partner, Mr Roberts. Like Mr Thompson, Mr Roberts agreed that the exchange became very heated. Mr Roberts agreed Mrs van Schagen had asked him to intervene in the altercation.
- In cross examination, Mr Van Schagen asserted that the altercation commenced with Mr Thompson “roaring” at him with a forklift and “jamming it on as if he was going to run over the top of [Mr Van Schagen]”. He described this event as coming “out of the blue” with no reason, forewarning or provocation on his part.
- During the conversation, Mr Van Schagen admitted that he called Mr Thompson a “wanker”, but denied calling him anything else.
- In her affidavit, Mrs Van Schagen referred to Mr Thompson running towards her husband and using “the most common and abusive vile language, the type which I have never ever heard before, calling my husband abusive names.” She said that her husband told him to go, as he had work to do.
- I accept that the incident occurred as described by Mr Thompson in his email and evidence.
- Accepting the evidence of the other tenants and Mr Tunks, I find that Mr van Schagen was aggressive towards the other tenants and customers. I find he was difficult to deal with, considered that he had an entitlement to the exclusive use of the car parking spaces in front of his Premises and had generally made life unpleasant for others in the complex.
- I accept that some of the incidents alone might not have individually constituted a breach of clause 5.2(1) of the Lease but the nature of the disturbance was multitudinous and sufficient to amount to a disturbance within the meaning of clause 5.2(1).
Item 5 – Failure to give an undertaking
- Contrary to the request made in the Notice to Remedy, SunBuster had not, as of the date of hearing, provided Lainor with a written undertaking that SunBuster would not disturb and verbally abuse or interfere with any lessee or any customer of any lessee.
- In cross examination, Mr Tunks acknowledged that since the issue of the Notice to Remedy on 4 July 2018, he has no knowledge of any verbal abuse between SunBuster and any other lessee or a customer of the other lessees.
Validity of Notice to Remedy – Lack of specificity
- SunBuster submits that the Notice of Remedy was invalid as it failed to meet the requirements stipulated in s 124 of the Property Law Act 1974 (Qld) (Property Law Act) as it lacked specificity.
- Section 124(1) of the Property Law Act requires that:
“(1) A right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant, obligation, condition or agreement (express or implied) in the lease, shall not be enforceable by action or otherwise unless and until the lessor serves on the lessee a notice—
- (a)specifying the particular breach complained of; and
- (b)if the breach is capable of remedy, requiring the lessee to remedy the breach; and
- (c)in case the lessor claims compensation in money for the breach, requiring the lessee to pay the same;
and the lessee fails within a reasonable time after service of the Notice to Remedy the breach, if it is capable of remedy, and, where compensation in money is required, to pay reasonable compensation to the satisfaction of the lessor for the breach.”
- For a Notice to Remedy to be effective it is required that the notice identifies with clarity what the relevant breach was and details how the breach is to be remedied. The notice must contain a level of specificity such that the tenant has full notice of what they are required to do, and should not be capable of misunderstandings or ambiguous construction.
- A general notice of breach of a specified covenant is not sufficient, even if that specified covenant is set out in full.
- It is clear that Lainor had, on several occasions, gone to considerable effort to detail to SunBuster the alleged breaches of the Lease and what Lainor required SunBuster to do to remedy the breaches.
- Evidently, the Notice to Remedy was clear enough for SunBuster to deny that it was in breach, claim that it was compliant and confirm that it was in conformity with the terms of the Lease.
- Its subsequent actions indicated that SunBuster understood the complaints and acted accordingly. It is accepted that SunBuster removed the bollards, removed the awning, changed the Parking sign and desisted from interacting with other tenants and their customers.
- I am satisfied SunBuster had full notice of what it had to do to remedy the breaches as described.
- I find that the notice was valid.
Entitlement to bring Application
- SunBuster has submitted that, in any event, all the breaches had been remedied prior to Lainor terminating the Lease.
- I accept that, since the issue of the Notice to Remedy in July 2018, there were no further altercations with the other tenants and customers as a result of car parking issues. There was, after that date, however, evidence of his unnecessary interference in the business of AMA through his discussions with an AMA employee and the continuing presence of the Parking sign restricting access to the parking spaces in front of SunBuster’s premises.
- Lainor submitted that the breach of clause 5.2(1) arising as a result of the altercations with other tenants and customers was a breach incapable of being remedied and entitled Lainor to terminate without issuing a notice to remedy. Lainor described the request for an undertaking not to disturb and verbally abuse or interfere with any other tenant or their customers as no more than an offer not to enforce Lainor’s rights, if the undertaking had been given. SunBuster never provided the undertaking.
- Lainor relied on the statements by the Court of Appeal in Giacomi v Nashvying Pty Ltd and Others in support of the submission that the breaches are not capable of being remedied. The Court referred to the statements of Slade LJ in Expert Clothing Services and Sales Ltd v Hillgate House Ltdwhere, in considering s 146 in the UK Property Law Act, which is the analogue of s 124, it was said:
“..the concept of the capability of remedy for the purpose of s 146 must surely be directed to the question whether the harm that has been done to the landlord by the relevant breach is for practical purposes capable of being retrieved.”
- O'Connor LJ, who agreed with Slade LJ’s reasons, in short reasons of his own, observed:
“How are such breaches to be identified? [i.e. breaches not capable of remedy] Looking at s 146(1) as a whole, I would say that the question must be examined at the date of the notice. Once a breach of covenant has been committed, the fact that there has been a breach cannot be expunged so that to remedy a breach must mean to do what is necessary to put the lessor back into the position he would have been in had no breach been committed. If this cannot be done within a reasonable time or at all, the breach is not capable of remedy; if it can, it is.”
- Whilst the Court in Hillgate House was constrained in its ultimate decision by earlier English authority which drew a distinction between positive and negative covenants, the statement of principles made are nevertheless relevant and were referred to with approval by the Court of Appeal in Nashvying. The Court of Appeal also approved the statement by Sugerman J in Batson v De Carvalho which has also been adopted or approved in other Australian decisions. In Batson, Sugerman J observed:
“To “remedy” a breach is not to perform the impossible task of wiping it out – of producing the same condition of affairs as if the breach had never occurred. It is to set things right for the future, and that may be done even though they have for some period not been right, and even though that may have caused some damage to the lessor (for which he is entitled to claim compensation under s 129(1)(c)) provided: Rugby School (Governors) v Tannahill ( 1 KB 87), that the breach has not resulted in a detriment to the premises which cannot be removed within a reasonable time.”
- The question therefore is whether it is possible to set things right for the future or has the breach resulted in a detriment to the premises which cannot be removed within a reasonable time.
- In the present case, I accept that the disturbance of the occupants of the adjacent premises by SunBuster has resulted in a detriment to the premises which cannot be removed within a reasonable time.
- Indeed, the disturbance was such that in the last altercation involving Mr Thompson, Mr Thompson told Mr van Schagen that he was no longer welcome in TileConnect’s premises and indicated that he would take out a restraining order if necessary.
- Mr van Schagen’s conversation with the employee of AMA about the unlawfulness of the business and the likelihood that it would be closed down has not been withdrawn.
- Whilst Mr van Schagen has managed to desist while these proceedings remained on foot, in view of the evidence given in Court and his strong belief as to his entitlement to exclusive access to the car parking spaces and his attitude towards previous incidents, I do not accept that his compliant behaviour will continue. I do not accept that he is capable of continuing upon the finalisation of these proceedings of acting in a manner which does not disturb the other tenants in the future. He has not apologised for his past behaviour and refuses to give an undertaking about it. The breach is likely to linger to the detriment of the premises as a whole.
- In any event, I have found there is the continued presence of the Parking sign and the SunBuster sign and a director of SunBuster continued to park in the disabled zone.
- I find the requirement imposed by s 124(1) for re-entry have been met.
Right to Terminate the Lease
- SunBuster relied on a number of other arguments in defence of the claim for possession.
Breach of Essential Term
- SunBuster submits that the alleged breaches were not breaches of essential terms, relying on the test of essentiality as expressed in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd. In making that submission, it was accepted that the Lease provided that a breach of any term of the tenancy is an event of default. The Lease drew no distinction between essential and non-essential terms.
- In any event, I do not regard a term “requiring that the Tenant must not disturb the occupants of adjacent premises” as being a non-essential term, nor was the application based upon an alleged repudiation of the Lease.
Notice of Termination
- Apart from taking these proceedings, Lainor issued a Notice of Termination to SunBuster. SunBuster challenged that notice on two grounds: service and time for compliance.
Validity of Service
- Clause 9.2 of the Lease permits the lessor, where the tenant defaults and does not remedy the default, by notice to the Tenant to terminate the tenancy. Clause 16 of the Lease requires any notice to be given to any person to be in writing and given in accordance with s 347 of the Property Law Act.
- Section 347 relevantly provides as follows:
“(1) A notice required or authorised by this Act to be served on any person or any notice served on any person under any instrument or agreement that relates to property may be served on that person—
- (a)by delivering the notice to the person personally; or
- (b)by leaving it for the person at the person’s usual or last known place of abode, or, if the person is in business as a principal, at the person’s usual or last known place of business; or
- (c)by posting it to the person by registered mail as a letter addressed to the person at the person’s usual or last known place of abode, or, if the person is in business as a principal, at the person’s usual or last known place of business; or
- (d)in the case of a corporation by leaving it or by posting it as a letter addressed in either case to the corporation at its registered office or principal place of business in the State.
(1A) A notice so posted shall be deemed to have been served, unless the contrary is shown, at the time when by the ordinary course of post the notice would be delivered.” (Emphasis added).
- SunBuster submitted that the Notice of Termination was not validly served upon it, and therefore the termination of the Lease had not been effected as at the time of hearing.
- In making its submissions, it is not disputed that:
- (a)SunBuster’s principal place of business, as at the date of the Notice of Termination (and indeed as at the date of hearing), was the Premises; and
- (b)the solicitors for Lainor caused the Notice of Termination to be posted to SunBuster at the Premises by express post.
- Mr van Schagen’s evidence is that the Notice of Termination was never received.
- Section 347(1A) of the Property Law Act clearly provides that a notice posted to a corporation at its principal place of business shall be deemed to have been served at the time when by the ordinary course of post the notice would be delivered, unless the contrary is shown.
- SunBuster do not dispute that the Notice of Termination was posted and was addressed to their principal place of business. In his affidavit sworn 29 January 2018, for the first time Mr van Schagen says the Notice was not received. SunBuster submitted, “If the Notice is not served it is not effective and therefore the Notice of Termination has no effect.”
- That submission ignores the deeming provisions of s 347(1A) of the Property Law Act. What is required is proof of non-delivery: “…the fact of non-receipt does not displace the result that delivery is deemed to have been effected at the time it would have taken place in the ordinary course of the post.” Here, there is no evidence of non-delivery, for example the letter was not returned to sender.
- SunBuster submit that service of the Notice “could easily have been done in a secure way…by having the notice served personally upon SunBuster”. That may be, but Lainor have satisfied the provisions of s 347 of the Property Law Act and are not compelled to carry out additional steps to serve the notice upon SunBuster.
- I find that the notice is deemed to have been served.
Reasonable Time to vacate
- In reliance on s 137 of the Property Law Act, it was submitted that the Notice of Termination was invalidated as it must be for a reasonable period.
- Section 137 provides:
- (1)A notice to terminate a tenancy, including a tenancy at will, must be for a reasonable period.
- (2)What constitutes a reasonable period of notice depends on the circumstances, including the nature of the tenancy, the circumstances surrounding the creation of the tenancy, the terms (if any) of the tenancy, and any proper implications from the agreement (if any) of the parties with respect to the tenancy.
- (3)Subsection (1) does not apply to—
- (a)a tenancy for which a period of notice has, expressly or impliedly, been agreed on by the parties; and
- (b)a weekly, monthly, yearly or other periodic tenancy subject to this Act with respect to notices to terminate; and
- (c)a tenancy at will arising because of the abolition by this Act of the implication of a tenancy from year to year.” (Emphasis added).
- The terms of the Lease permitted Lainor, in the event of a default which is not remedied when the lessor requires it to do so, to do one or more of a number of things, including re-enter and take possession of the Premises and by notice to the tenant, terminate the tenancy.
- The Notice of Termination issued by Lainor required SunBuster to vacate the Premises within 14 days of the issue of the notice. SunBuster submitted that this period was unreasonable, particularly given that SunBuster was conducting a manufacturing business from the Premises, the Lease was for a period of three years (with two options to renew for a further three years), SunBuster has made a “significant investment” to operate its business at the Premises and the cost of the relocation of SunBuster’s business. I accept these submissions and find that a period of 14 days to vacate the Premises was, in the circumstances of this particular tenancy, unreasonable.
- However, the issuing of a notice to terminate was not a requirement of the Lease nor a requirement of the Property Law Act. Section 124 of the Property Law Act requires that a right of re-entry or forfeiture cannot be enforced until the lessor has served a Notice to Remedy in compliance with s 124(1).
- The section plainly refers to notices to remedy breach and makes no reference to the requirement for a notice of termination. There is no other provision in the Property Law Act requiring the service of a notice of termination before exercising the right of re-entry for breach of any covenant, obligation, condition or agreement in a fixed term tenancy.
- Therefore, the fact that I have found that the notice period stipulated in the Notice of Termination was unreasonable cannot defeat Lainor’s claim for recovery of possession of the Premises.
Relief against Forfeiture
- On the basis of the forgoing, Lainor is entitled to recover possession of the Premises. The Lease has been validly terminated and the question becomes whether SunBuster is entitled to relief against forfeiture.
- The jurisdiction to grant relief against forfeiture is set out in s 124 of the Property Law Act. Section 124(2) provides:
“Where a lessor is proceeding by action or otherwise to enforce such a right of re-entry or forfeiture, or has re-entered without action the lessee may, in the lessor’s action (if any) or in proceedings instituted by the lessee, apply to the court for relief, and the court, having regard to the proceedings and conduct of the parties under subsection (1), and to all the other circumstances, may grant or refuse relief, as it thinks fit, and in case of relief may grant the same on such terms (if any) as to costs, expenses, damages, compensation, penalty or otherwise, including the granting of an injunction to restrain any like breach in the future, as the court in the circumstances of each case thinks fit.”
- Section 124(7) provides that, “The rights and powers conferred by this section are in addition to and not in derogation of any right to relief or power to grant relief had apart from this section.”
- In Ace Property Holdings Pty Ltd v Australian Postal Corp, Keane JA stated that:
“Consideration of the question of relief from forfeiture requires attention to a number of issues: the gravity of the breach or breaches in question, whether the breach was inadvertent or wilful, the damage to the covenantee and the relative loss to the covenantor if relief is not granted.”
- Keane JA was restating what Lord Wilberforce in Shiloh Spinners Ltd v Harding (a lease case) had described as the “appropriate” considerations guiding the exercise of equity’s jurisdiction to relieve against forfeiture for breach of covenants by way of security for the production of a stated result. His Lordship said:
“The word ‘appropriate’ involves consideration of the conduct of the applicant for relief, in particular whether his default was wilful, of the gravity of the breaches, and of the disparity between the value of the property of which forfeiture is claimed as compared with the damage caused by the breach.”
- SunBuster submits that, in the event that Lainor is successfully able to forfeit the lease, SunBuster would be “devastated financially”. I accept that the loss of the Lease would come at a significant financial cost to SunBuster: SunBuster would suffer the expenses of re-locating and would lose the rights to the option to renew for a period of six years, assuming both options would have been exercised.
- I do not accept Mr van Schagen’s evidence that Lainor stood to gain financially because it will be able to rent the Premises out at a higher rent. When it was put to Mr Tunks that he had an expectation of a higher rent, he said that he “very much doubt[ed] it.” He stated that the claim for vacant possession of the Premises is not about getting a new tenant that is more profitable, it is just about getting another tenant.
- I do not accept the assertions made by Mr van Schagen that Lainor were “looking for an excuse to mischievously terminate out lease agreement.”
- Such accusations are serious ones. Typically, if courts detect an opportunistic ulterior motive on behalf of the lessor in pressing their power to forfeit the lease agreement, relief against forfeiture will be readily forthcoming.
- I accept the evidence of Mr Tunks given at the hearing where he said that, if Lainor was successful in reclaiming vacant possession of the Premises, he would hope to get the same amount of rent that was being paid under the Lease with Sun Buster, and had no expectation of receiving a higher amount of rent from a subsequent tenant. I therefore reject the assertion that Lainor had an ulterior motive in terminating the Lease and its application for vacant possession.
- Of relevance on the facts here, are the cases where courts have refused to grant relief against forfeiture because of wilful and persistent breaches by the lessee, showing a continuous disregard for the lessor’s rights.
- Lainor has submitted, which I accept, that SunBuster had breached its obligations under the Lease over a protracted period of time. It is clear from the evidence that SunBuster’s breaches of the Lease have ensued from almost immediately after SunBuster took possession of the Premises and, although it is conceded that some of the complained breaches had been remedied by the date of hearing, there were still un-remedied breaches and certain breaches not capable of remedy.
- The breaches of the Lease by SunBuster can be characterised as wilful. It is clear that most of the breaches, many of which included aggressive outbursts, showed a wilful and blatant disregard for the rights of Lainor and the rights of the neighbouring tenants of the Property and their customers. When these breaches were personally raised with Mr Van Schagen by another tenant, Mr van Schagen became agitated.
- When the letter detailing the breaches was first sent in March 2018, SunBuster denied that it was in breach and continued to act in the same manner complained of. At the hearing, the balance of Mr Van Schagen’s evidence indicated a continued disregard for the rights of Lainor and the neighbouring tenants and a complete lack of remorse or insight into his behaviour.
- In exercising its discretion to grant relief against forfeiture, the court must be satisfied that there is a reasonable expectation that the lessee will honour the lease obligations in future. In undertaking this task, the court will consider the actions of the lessee. Factors to consider will be whether the tenant has attempted to remedy the breaches alleged by the lessor as far as possible and come to court with clean hands. A tenant who has evinced an intention to continue or repeat the breach of covenant ought not to be relieved.
- If relief were granted, I am not satisfied that SunBuster would honour the terms of the Lease. I am unconvinced by the statement made by Mr van Schagen that SunBuster “is willing to remedy any breaches at the order of the court.”
- Despite request, Mr van Schagen had refused to proffer the undertaking requested by Lainor. I am not convinced that an order of the court will have any material impact upon the behaviour of Mr Van Schagen, particularly given that the source of his objectionable behaviour, being the issue of allocated parking at the Property, has not been resolved in his favour. Mr Van Schagen had made it abundantly clear in his evidence that the issue of parking at the Property is extremely important to him, and given that most, if not all, of the breaches of the Lease by SunBuster have arisen from its desire for allocated parking spaces, I am not of the belief that SunBuster will refrain from further altercations and objectionable conduct in breach of the Lease in the future.
- I accept the submissions of Lainor in support of this finding that, Mr Van Schagen has a history of this type of objectionable behaviour. In cross examination, he plainly accepted that, at his past rental premises, he had at least one dispute with another person on the issue of car parking and had even jacked up a car on bricks because he was of the view that the car owner had parked in the wrong spot.
- I do not consider the court should grant SunBuster relief against forfeiture.
- As I have accepted that Lainor should recover possession of its Premises and that relief against forfeiture will not be granted, it is the case that SunBuster has trespassed on the Premises since that time and Lainor is entitled to mesne profits.
- The measure of mesne profits is the rent payable for the Premises under the Lease immediately before its termination; being an amount of $6,623.50 per month.
- The Notice of Termination was issued by Lainor on 16 August 2018, and required SunBuster to vacate the Premises within 14 days of the issue of the notice.
- Lainor concedes that SunBuster’s non-payment of rent was unavoidable in the period between the date of termination and 9 November 2018 as Lainor did not request nor accept any rental payments from SunBuster.
- On 9 November 2018, the solicitors for Lainor wrote to SunBuster’s solicitors, providing a bank account into which SunBuster could make payments and asserting the positon that Lainor was entitled to either mesne profits or rent at the contractual rate in the Lease.
- As a result of correspondence received by the Court subsequent to the hearing, it is understood that, at the time of vacating the Premises, no payments, either in the nature of rent payments or mesne profits, were owing. An order permitting liberty to apply will be made, in case that understanding is incorrect.
- Given the findings of the Court, the orders which would have made by the Court and in the absence of any submissions suggesting that costs should not follow the event, it is appropriate and just that the respondent, SunBuster, be ordered to pay the costs of the applicant, Lainor.
- For these reasons, I make the following orders:
- The respondent pay the applicant’s costs.
- The parties have liberty to apply.
T2-45 l 46 – T2-47 ll 1-2.
 T1-70 ll 12-15.
 T1-101 ll 18-19.
 T2-40 ll 40-41.
 Nguyen v Valore  NSWSC 1364, .
Gerraty v McGavin (1914) 18 CLR 152, 159; Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service  NSWCA 268, ; Drama Unit Pty Ltd v Fearndale Holdings Pty Ltd  NSWSC 1895, -.
Piggott v Middlesex County Council  1 Ch 134, 146.
 Fletcher v Nokes  1 Ch 271, 274; Re Serle; Gregory v Serle  1 Ch 652, 657.
  QCA 454 (Nashvying).
  2 All ER 998 (Hillgate House).
 Ibid at .
 Ibid at .
(1948) 48 SR (NSW) 417 (Batson).
 See for example Ansett Australia Ltd v Diners Club Pty Ltd  VSC 102; Glentham Pty Ltd v Luxer Holdings Pty Ltd  WASC 132.
 (1948) 48 SR (NSW) 417, 427.
 (1938) 38 SR (NSW) 632.
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 95-97; See also Skalkos v T&S Recoveries Pty Ltd (2004) 141 FCR 107, 116; Repatriation Commission v Gordon (1990) 26 FCR 569, 265; Clampett v Queensland Police Service  QCA 345; Deputy Commissioner of Taxation v Coco  QSC 119, .
 QCA 55.
  AC 691.
 Ibid at 723-724.
See for example Byron Bay Retirement Villages Pty Ltd v Zandata Pty Ltd  NSWSC 1123; Steel Supplies Bega v Shoveller  NSWSC 1612.
Beamer Pty Ltd v Star Lodge Supported Residential Services Pty Ltd  VSC 236 at .
- Published Case Name:
Lainor Investments Pty Ltd v SunBuster Solar Shades Pty Ltd
- Shortened Case Name:
Lainor Investments Pty Ltd v SunBuster Solar Shades Pty Ltd
 QDC 59
29 May 2020