Amber Werchon Property v Davison [2022] QCAT 228

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Amber Werchon Property v Davison [2022] QCAT 228 PARTIES: AMBER WERCHON PROPERTY (applicant) v KELLIE DAVISON (respondent) APPLICATION NO/S: RSL150-21 MATTER TYPE: Retail shop leases matter DELIVERED ON: 23 June 2022 HEARING DATE: 20 June 2022 HEARD AT: Brisbane DECISION OF: Member King-Scott ORDERS: The Tribunal directs that Kellie Davison pay Amber Werchon Property the sum of $10,727.22 by 4:00 pm 22 July 2022. CATCHWORDS: RETAIL SHOP LEASE – Lease abandoned on basis premises not fit for purpose – tenant in arrears at time of abandonment - claim for water and other damage - no cross - application Retail Shop Leases Act 1994 Queensland Civil and Administrative Tribunal Act 2009 Retail Shop Leases Act 1994 s 43 APPEARANCES & REPRESENTATION: Applicant: Self-represented Respondent: Self-represented REASONS FOR DECISION [1] The Applicant (Amber Werchon Property) is the landlord, and the Respondent (Kellie Davison) was a tenant in premises situated at 108 Currie Street, Nambour. Ms Davison occupied a ground floor street front hair dressing salon. (‘the tenancy’). There were other tenants in the premises. [2] Ms Davison was an assignee of the lease (‘the Lease’) from the previous lessee Leefh Pty Ltd.1 The term of the lease was 1 July 2017 to 30 June 2020.2 The lease was 1 Deed of Covenant dated 20 June 2019 Annexure A to Notice of Dispute 2 Lease Annexure B to Notice of Dispute. -- 1 of 6 -- 2 assigned on 30 June 2019 when Ms Davison purchased the business from the previous owner. Surprisingly, Ms Davison had no communications with the landlord and accepted assurances from the seller that in certain respects repairs would be carried out by the landlord. [3] By email dated 13 January 2020 the landlord asked Ms Davison whether she was going to exercise the 3-year option under the lease. She responded the same day advising that that she was thinking of closing the salon or moving the salon.3 Later that day she inquired as to a figure to finish her lease. On 15 January 2020 Ms Davison emailed the landlord with a request that she be released form her lease from 1 March 2020.4 No reasons were given in any of these communications.5 [4] The landlord refused but suggested as an option she find another tenant to take over. [5] Ms Davison abandoned the tenancy on 3 March 2020 by posting the keys back to the landlord. [6] The landlord’s claim is set out in the Notice of Dispute as follows; (a) Arrears of rent $8,182.00 (b) Reinstatement of the tenancy $1,950.00 (c) Filing fee $352.00 (d) Interest $243.22 (e) Total $10,727.22 [7] Ms Davison has filed a response. It appears that she has not paid the filling fee for a counter-application so her response remains just that, a response even though it contained a counter claim for damages. See Directions made on 14 May 2021 and 20 August 2021. [8] Ms Davison resists the claim on the basis that the tenancy was not fit for occupation because of a failure to maintain the premises and their damaged state. Indeed, she alleges that the premises posed a safety risk to her and her customers. Existing problems Respondents case [9] Ms Davison claims that on entering the lease she observed maintenance problems. Particulars of the damage are as follows: (a) Damage to walls - never repaired. (b) Damage to door - repaired. (c) Damage to door - repaired. (d) No light/water damage in corner - never repaired. (e) Crack in wall – never repaired. (f) Exposed asbestos in the ceiling – never repaired. 3 Email dated 13/1/20 Annexure V to Statement of Danielle Porteous filed 25 June 2021. 4 Email dated 15/1/2020 Annexure F to Notice of Dispute. 5 Email dated 16/1/2020 Annexure F to Notice of Dispute -- 2 of 6 -- 3 [10] Each of the above items are supported by photographs. [11] Ms Davison complains that no entry report was done when she took over the tenancy. [12] Ms Davison says that the only item attended to was the broken door and despite numerous attempts to have other matters attended to, nothing was done. [13] On 15 January 2020, Ms Davison says she spoke to Tracey at the landlord’s office and told her that nothing has ever been rectified from the beginning of the lease and she was concerned about the gutters which needed cleaning. She refers to an email of that date, but no reference is made to the gutters in the email.6 Landlord’s case [14] It should be borne in mind that as assignee of the tenancy Ms Davison accepted the tenancy in the condition it was in and assumed the liabilities and obligations of the assignor under the lease which included the obligation to reinstate the premises at the end of the term. [15] The Landlord as produced invoices for the door repairs dated 13 July 2019. There is also an invoice for work performed on 17 September 2019 for replacement of two fluorescent lights at the tenancy.7 [16] The crack in the wall was considered cosmetic and the photographs do not depict the cracks as serious or life threatening. [17] The Asbestos Management Plan prepared for the landlord in October 2013 revealed no significant risk.8 This was confirmed by a later report dated 30 September 2020 that identified some risks that required attention, but they were not present in the demised premises.9 [18] There is an email trail that tends to contradict Ms Davison’s assertions that nothing was attended to. It starts with an email on 24 October 2019 from Kristi Simi, the landlord’s Commercial Property and Leasing Manager, with an apology that maintenance was not being attended to by Tracey, the previous occupant of the office. Ms Simi offers to come to the tenancy to take some photographs. She advises she has a contractor, but they are booked out until Christmas. She took photographs on 29 October 2019. She noted the condition of the ceiling in the salon. The beauty wall and the skirting board. Again, she reiterated the difficulty in getting tradesmen. She also requested access prior to trading hours. On 4 November 2019, she advised that it will not be done the next day and requests another suitable time. [19] By this time Ms Davison is in arrears of rent. Ms Davis emails on 11 November 2019. Your chasing me for money. You can’t come and sort out the water or even come to the salon. Knowing you’re in Nambour today. Ms Simi responded10: 6 Email dated 15/1/2020 Annexure F to Notice of Dispute. 7 Annexure M to Statement of Danielle Porteous filed 25 June 2021. 8 Annexure g to Statement of Danielle Porteous filed 3 September 2021. 9 Annexure D1 to Statement of Danielle Porteous filed 25 June 2021. 10 Annexure R to Statement of Danielle Porteous filed 25 June 2021. -- 3 of 6 -- 4 Kellie, you make no effort to communicate with me knowing I am trying to help you the best I can. You don’t reply to my emails hence the water problem not being repaired. I offered the assistance to no avail. I dropped into the salon a week ago after not receiving a reply from you and you were not there. Tell me what you would like me to do, and I am more than happy to do the best I can? However, you need to talk to me Kellie. I am here to help. [20] On 13 November 2019 the following email was sent by Ms Davison. Still, no one has come to the salon due to water. Ms Simi responded on 14 November 2019: 11 Kellie I am not a mind reader. You haven’t explained ‘water’ to me? What is the problem? I can get a plumber there today no problems. I haven’t even heard of the water problem. I know about staining to the roof obviously which I am still awaiting a reply from you. Please advise what the problem is and I will arrange the plumber today? Ms Davison responded: So 2 messages left on your phone. I’m telling you there’s a water problem. It’s coming through the wall I left that msg on Monday. It’s not the basins as I have had Knox plumbing out to look at it. We can only use one basin I want the ceiling fixed. Monday would be great (sic.) a Great day Ms Simi responded: 12 Ok, are Knox going to fix it? I would prefer to have my plumber attend for you. I will advise Bones Plumbing to attend today. There is a leak through the wall cavity? I will arrange for a handyman to attend Monday to fix the ceiling. Do you think there will be any damage to the wall? I can always have that repaired on Monday at the same time. [21] Skipper Plumbing attended on 14 November 2019 they found a leak from the waste pipe under the hand basin. That required the concrete floor to be cut to gain access. They recommended coming before opening. There were still 2 basins in use. The work was carried out on 19 November 2019. [22] It seems that the stained ceiling was not attended to as it was still an issue in February 2020 when a new Property Manager observed in an email dated 13 February 2020: … However I will chat to the owner this afternoon about the ceiling as I can see that it is something you have been requesting for some time, I will find out where it is and let you know.13 11 Annexure S to Statement of Danielle Porteous filed 25 June 2021. 12 Annexure S to Statement of Danielle Porteous filed 25 June 2021. 13 Annexure w to Statement of Danielle Porteous filed 12 August 2021 -- 4 of 6 -- 5 Hot water system [23] On 19 November 2019, the hot water system burst. Ms Davison advised the landlord (Ms Simi) and a plumber was sent to repair. Repairs were carried out promptly, it would appear the same day.14 The system was replaced. Ms Davison complained about the cost of clean-up and lost income, but the landlord says they were never made aware of any problem, nor was there a request for assistance. Ms Davison does not have a counter-application. Water inundation Respondents case [24] On 12 February 2020 there was a heavy down pour, and the water came in through the ceiling by way of the light fixtures. [25] Ms Davison says that 300 bags of leaves were taken from the gutters. There is no corroboratory evidence of this. Landlord’s case [26] The plumber found the sump to be blocked by a bottle.15 He said it was not uncommon as people occasionally throw debris onto the awning. In any event the problem was rectified. The electrician energised the circuit and says he would not have done so if it was unsafe. Workplace Health and Safety report [27] Ms Davison reported it the following day to the department of WorkPlace Health and Safety. (‘WPHS’) An Inspector attended and reported on 25 February 2020 and by notice 2005998 directed that the landlord must ensure the electrical system is safe. By a further Notice 1200599716, on the same date he directed the landlord maintain and ensure control measures to ensure that the downpipes are kept free of leaf matter to ensure rainwater does not enter the building. He saw the risks exposed to workers and others was from slips and falls. No mention is made of asbestos risks.17 [28] The problems were repaired by tradesmen well before the inspections. The landlord says that no further action was required by WPHS. [29] The work orders and invoices for the plumber and electrician do not suggest that there were any ongoing problems. During the hearing it was apparent that the people arranged by the landlord to give evidence were not the proprietors of the businesses and not the individuals who carried out the work. The proprietor statements were based on the reports by the individuals who caried out the work. [30] The electrician who carried out the work was eventually called but could not recall any details of the job but confirmed that he would not have energised the circuit if there was any water still present or if it was unsafe to do so. The plumber was not able to be found. Nevertheless, it is not unreasonable for them to have little or no recollection, the work orders and invoices are probably the best evidence available of 14 Annexure b to Statement of Danielle Porteous filed 12 August 2021 15 Annexure x to Statement of Danielle Porteous filed 12 August 2021 16 Annexure z to Statement of Danielle Porteous filed 12 August 2021 17 Annexure 10 Kellie Davison statement filed 2 August 2021. -- 5 of 6 -- 6 the work they did. I accept those documents as being an accurate record of the work done. [31] Ms Davison relied upon statements of two previous tenants. I was advised that neither would make themselves available for cross-examination. Their evidence has not been tested and is of limited value. Discussion [32] It was apparent from the initial enquiries about ending the lease that the failure to maintain the property as fit for use was not uppermost in her mind. Ms Davison was behind in her rent and I expect was looking for somewhere cheaper. She had some grievances with the landlord but I do not believe they were the basis of her abandoning the lease. [33] Indeed, some of the complaints she makes in relation to a failure to maintain the property were matters that fell within her responsibility under the Lease. The tenant under the Lease had certain obligations including promptly replacing broken and defective light bulbs and tubes and repairing leaking taps and cisterns and to clear broken pipes.18 For instance, Ms Davison made claims that light tubes had not replaced yet it was her responsibility to do so. [34] Instead of abandoning the premises, Ms Davison should have exercised her rights under clause 6.2 of the Lease by giving the landlord 3 month’s notice to reinstate the premises if they were unfit for use as she claimed. Alternatively, she could have claimed compensation under s.43 of the Retail Shop Leases Act 1994. It should be noted that if there was a defect in the leased building (e.g cracks in a wall or stained ceiling) that was apparent at the time the tenant entered the lease or took it by way of assignment, then such defects were excepted from compensation.19 Despite being given an opportunity, in the course of proceedings, to file a counter-application she failed to do so. [35] In conclusion, I order Ms Davison to pay $10,727.22 to the landlord. I observe that neither the obligation to pay nor the quantum of the make good sum of $1,950.00 was challenged by Ms Davison. Interest on arrears was claimed up to 12 October 2020 and there was no request for it to be calculated to date. 18 Clause 8.1 Schedule Lease Annexure B to Notice of Dispute. 19 Section 43 (d) (ii) Retail Shop Leases Act 1994 -- 6 of 6 --