Brisbane Parking Technologies v Ank Pty Ltd [2015] QDC 25

DISTRICT COURT OF QUEENSLAND CITATION: Brisbane Parking Technologies v Ank Pty Ltd [2015] QDC 25 PARTIES: BRISBANE PARKING TECHNOLOGIES PTY LTD ACN 165 783 031 (plaintiff/applicant) v ANK PTY LTD ACN 051 541 729 (defendant/respondent) FILE NO/S: 398/15 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 13 February 2015 ex tempore DELIVERED AT: Brisbane HEARING DATE: 13 February 2015 JUDGE: Samios DCJ ORDER: 1. Order as per draft CATCHWORDS: PRACTICE – INJUNCTIONS AND DECLARATIONS – PAYMENT INTO AND OUT OF COURT – where the plaintiff leased property from the defendant landlord – where the plaintiff paid to the defendant a cash bond as a guarantee for the lease of the property – where the defendant allegedly locked out the plaintiff from the property for breach of the lease due to the plaintiff allegedly not paying rent – where the plaintiff alleged that it was not aware of any breach of the lease – where the plaintiff claims a declaration that the defendant did not provide a reasonable time for the plaintiff to remedy the breach of the lease – where the plaintiff seeks damages and/or compensation and/or penalty from the defendant for termination of the lease – where the plaintiff seeks an injunction to restrain the defendant from dealing with the cash bond – where the plaintiff seeks an order to have the defendant pay the cash bond into the court – whether the plaintiff is entitled to the relief that it seeks Legislation Property Law Act 1974 (Qld) s 124(1), 142(2) -- 1 of 9 -- 2 Cases Ceresola TLS AG v Thiess Pty Ltd & John Holland Pty Ltd [2011] QSC 115 COUNSEL: Mr S Trewavas, solicitor, for the plaintiff/applicant Ms S McNeil, counsel, for the defendant/respondent SOLICITORS: Creevey Russell Lawyers for the plaintiff/applicant Hollingworth & Spencer Lawyers for the defendant/respondent [1] HIS HONOUR: Proceedings have been commenced, on the 2nd of February 2015, in this court, between the plaintiff and the defendant, by which the plaintiff claims a declaration that the defendant did not provide a reasonable time to remedy the breach of the lease of property. Further, the plaintiff seeks damages and/or compensation and/or penalty for termination of the lease, pursuant to section 142, subsection (2) of the Property Law Act.1 [2] There is no dispute the plaintiff was the tenant from the defendant as landlord, in Finsbury Street, Newmarket. The lease provided for rent to be paid of approximately $9000 a month. In particular, clause 16.1 provided for a bank guarantee and 16.2 provided: If the tenant does not comply with any of its obligations under this lease the landlord may call upon the bank guarantee by contacting the branch of Westpac Banking Corporation in Ashgrove, Queensland. [3] There is no dispute that a bank guarantee was not provided to support the lease. What was provided was a cash sum of money of $50,337. The plaintiff claims, for a number of reasons, he was not aware that he was in breach of the lease. The defendant claims, 1 Property Law Act 1974 (Qld). -- 2 of 9 -- 3 on the other hand, that the defendant was given as many as five ways of being notified that the December rent had not been paid. [4] The long and the short of it is that the December rent had not been paid on the due date, and the defendant on the 12th of December 2014 gave a notice to remedy breach, the rent not having been paid. Then, on the 16th of December 2014, two business days later, the defendant took possession of the premises and locked out the plaintiff. [5] One can see the frustration of the defendant, from Mr Ignjatovski’s affidavit, where, in paragraph 8, he says that the January rent was due on 1 January 2014 and paid on 6 January 2014; March 2014 was due on 1 March 2014 and paid on 2 March 2014; June 2014 rent was on due 1 June 2014 and paid on 10 June 2014; September 2014 rent was on due 1 September 2014 and paid on 29 September 2014; November 2014 rent was on due 1 November 2014 and paid on 3 November 2014; and, of course, the December 2014 rent was on due 1 December 2014 and not paid at all. It certainly was not paid by the 16th of December 2014, when the plaintiff was locked out. [6] I have read the affidavit of Mr Addley, who is the director of the plaintiff. He gives reasons for why he may not have known of the overdue rent. But the fact remains that he was not abiding by his obligations to pay the rent when it was due. He may have been wanting to take a holiday and have time off, or he may have closed off the fax machine, or whatever he was doing, the fact remains, the rent was not paid and he was not attending to his obligation. [7] Nevertheless, what has happened is that the plaintiff is concerned to recover damages it says it has suffered as a consequence of being unreasonably locked out; that is, -- 3 of 9 -- 4 under section 124, subsection (1) of the Property Law Act2 ‘A right of re-entry […] for a breach of any covenant, obligation, condition or agreement’ in a lease is not ‘enforceable by action or otherwise unless and until the lessor serves on the lessee a notice’ referred to in the section 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. [8] The application before me today is brought by the plaintiff seeking an order that the defendant be restrained from disposing of, dealing with or diminishing the $50,337. Further, the plaintiff seeks an order that the defendant pay into court that sum. [9] The plaintiff’s submissions are that the plaintiff was not given reasonable time to remedy the breach after the notice was served; that is, only two business days was given, between the Friday, the 12th of December 2014, and Tuesday, the 16th of December 2014. The submission is that the lessor failed to give a reasonable time. In that respect, it is said, this is a serious question to be tried. [10] When addressing the submissions, the defendant submitted that if there is a question, it could only be the lessor’s entitlement to call on and deal with the cash bond. [11] To my mind, these both are, in the circumstances of this case, capable of being serious questions to try. They are, basically, the same issue. While it may be frustrating to Mr Ignjatovski to have the rent always paid late, or, if not always, substantially always, and the fact remains that the legislation does provide for a tenant to have a reasonable time after service of the notice to remedy the breach, I am satisfied there is 2 Ibid. -- 4 of 9 -- 5 a serious question to be tried. It is, in my words, the entitlement of the defendant to access the bond – or the cash money, as it has turned out to be, to meet what the defendant may claim to be the unpaid rent and any other losses the defendant might claim to have flowed from having to lock out the plaintiff, who was, according to the defendant, in breach of the lease. [12] Another question that arises on an application of this kind is the balance of convenience, or, perhaps, why damages might not be an adequate remedy. [13] I have been assisted by Ms McNeil is her submissions. She has helpfully referred to the authorities dealing with injunctive relief against a lessor or a party to a contract calling upon a bank guarantee or performance bond, where is has been held that a party may be restrained from calling upon it, where it is clear that that party intended to call upon the bond has no right to the amount. The Queensland decision referred to is Ceresola TLS AG v Thiess Propriety Limited and John Holland [2011] QSC 115 the decision of Daubney J. [14] In my view, here there is, clearly, bad blood now between the plaintiff and the defendant. In my view, the defendant has every intention of calling on the bond to meet what he thinks he is out of pocket for and any other future losses. I also appreciate, of course, that the plaintiff likewise would want to secure this amount to meet what he says are the losses he has suffered and for which he has commenced proceedings to recover. -- 5 of 9 -- 6 [15] One of the arguments that was submitted by Ms McNeil was that the defendant is a substantial corporation. That may be so, however, its fortunes are not always known. I’ve come to the view that it is a balancing exercise and I am not convinced that damages are an adequate remedy when the sum involved here might be consumed before trial. She was right that it is in a way a security for costs application, but it is not exactly that and for those reasons I do not see it as a being prohibitive from being sought in this case in the way it has been in the application. [16] I appreciate there are concerns about Mr Addley’s own financial circumstances. Again, that is a factor that I had to weigh up. A bankruptcy might be a serious consideration for him and something he might seek to avoid. Therefore, I’ve come to the view that he has an interest in ensuring that he not just take a hit, as it were, financially to spite the defendant. Therefore, on balance I have come to the view that on the balance of convenience, and there being a serious question to be tried, I should make the orders sought by the applicant. Therefore, there will be an order as per the draft initialled by me and left with the papers subject to the question of costs to be argued. [17] Yes, Ms McNeil, do you want to say something on the question of costs over and above what’s written in this draft order? [18] MS McNEIL: Well, your Honour, yes, I do. I accept the fact that costs usually follow the event. In this instance, there was no notice given of this application being brought before it was served on my client, and that’s addressed in the affidavit of Mr Robinson. It certainly has never been the case that there has been any request for -- 6 of 9 -- 7 information about my client’s financial circumstances regarding the security it could provide in the event of a judgment. There certainly hasn’t been the ordinary conduct of the parties prior to lobbying a claim and a statement of claim in an application. [19] HIS HONOUR: What I’m inclined to do, subject to submissions from Mr Trewavas, is to – I’ll make the costs costs in the cause. [20] MS McNEIL: Your Honour, I would be agreeable to that. [21] HIS HONOUR: What do you say, Mr Trewavas? [22] MR TREWAVAS: Just one point, your Honour. My learned friend made a submission they weren’t notified. That’s not, in my submission, true. On the 5th of January 2015, page 43 of Mr Addley’s affidavit, second last paragraph, and I quote: We again make demand for the payment of the cash bond held by your client by 4 pm, 6 January 2015. We again confirm – this is the second letter confirming this – that if we do not receive payment of the bond as demanded we will be forced to commend legal proceedings to resolve this matter. [23] HIS HONOUR: Whose affidavit is this, sorry, Mr - - - [24] MR TREWAVAS: Mr Addley’s, your Honour. [25] HIS HONOUR: Right. -- 7 of 9 -- 8 [26] MR TREWAVAS: Document number 3 on the court file. It’s the last page on that bundle of exhibits. And that’s a second letter, your Honour. That’s – so there was correspondence - - - [27] HIS HONOUR: Sorry, what page? [28] MR TREWAVAS: 43. It’s the very last page of that affidavit, second to last paragraph. [29] HIS HONOUR: All right. [30] MR TREWAVAS: So to say that it wasn’t foreshadowed is – I accept there’s a lot of material – and I don’t mean to cast any aspersions at all, your Honour. There was a lot of material in a very short amount of time. But I’m just saying notice was given well in advance. This issue was subject to correspondence between solicitors, as we can see from the letter preceding that, being CA4 back from 23 December 2014. I appreciate the Christmas break was in between those two periods. [31] HIS HONOUR: Yes. Thank you, Mr Trewavas. [32] MR TREWAVAS: Thank you, your Honour. That occurred. [33] HIS HONOUR: I’ve come to the view that in this case the costs of the application should be costs in the cause. In that way, I think it does fairness to both parties and to -- 8 of 9 -- 9 the victor will go the spoils. So there will be an order then as per the draft initialled by me and left with the papers. Thank you, Mr Trewavas. [34] MR TREWAVAS: Thank you, your Honour. [35] HIS HONOUR: Yes, thank you, Ms McNeil. [36] MS McNEIL: Thank you, your Honour. [37] HIS HONOUR: I’ll just get my Associate to adjourn the court. -- 9 of 9 --