Baylis v Busby [1996] RSLT 13

_____________________________________________________________________ ______ [1996] RSLT 13 RETAIL SHOP LEASES ACT 1994 In the matter of Decision No. 46 of 1996 GLEN DAVID BAYLIS AND SUE-ELLEN BAYLIS - Claimants -and- COLIN BUSBY AND MARJORIE BUSBY - Respondents DECISION Given on...25... September, 1996 in Brisbane _____________________________________________________________________ _________ -- 1 of 6 -- 2 Decision This dispute came on for hearing at the Retail Shop Leases Tribunal Hearing Room on Wednesday 28 August 1996 and the hearing concluded on that day. The parties were not represented by Counsel or Solicitor. All parties appeared personally. The lease the subject of this dispute, as shown by photostatic copies filed by the parties, was entered into on 31 July 1993, between The Busby Company Pty Limited (as Trustee under Nomination of Trustees No. L57587 T) and Colin Ernest Busby and Marjorie Anne Busby (as Trustees under Nomination of Trustees No. L57590 H) and Colin Ernest Busby and Marjorie Anne Busby as lessors and Gerald Dermott Gannon as lessee. The term of the lease was from 2 August 1993 to 1 August 1996. The lease was registered on 5 January 1994 as No. L637608 H. The lessee's interest in the lease was assigned to the claimants by a "Deed of Assignment," of which no complete copy was produced to the Tribunal. In the dispute notice the claimants state that their "take over date" was 17 October 1994. No point was taken by the respondents concerning the lack of a complete copy of the "Deed of Assignment" or lack of written consent by the lessors to the assignment. No point was taken concerning the omission of the named trustees from the dispute notice or the claimant lessees' claim. The claim does not specify the basis on which it is made or state the exact terms of the orders sought, but again no point was taken. The Tribunal has considered the meaning of the term "retail shop" as it appears in the Retail Shop Leases Act 1994 ("the 1994 Act"), and the meaning of the term "retail shop lease" appearing in the 1994 Act. The premises in this dispute were let for use for the purpose permissible under Clause 3.01 as "Convenience and Takeaway Store and Residence." The premises are not situated in a shopping centre, nor used wholly for the carrying on of one or more retail businesses. But the Tribunal is satisfied that the predominant use is the carrying on of the retail business - that is, the "Convenience and Takeaway Store." The lease is a "retail shop lease." The Tribunal has jurisdiction to deal with this dispute. Because the lease is an "existing retail shop lease" as defined in the 1994 Act, the compensation provisions of the Retail Shop Leases Act 1984 ("the 1984 Act") apply - see section 14 of the 1994 Act. The main points of the dispute are set out in Part 6 of the dispute notice in the following terms:- "Our business premises floor area was torn up and left covered with bits of boards and planks which our customers and ourselves had to walk on from 24.10.95 to Monday 30 Oct. which was extremely dangerous to our customers. Then from Monday 30th -- 2 of 6 -- 3 Decision Oct. 1995 to November 4th we had no floors left as the whole shop, storeroom and kitchen and our residence floors stumps and bearers totally removed and had nowhere to live except in a motel 6 nights and no shop to trade out of." The basis of the tenants' claim for compensation is set out in the particulars filed by them in the following terms:- "Accommodation costs $472.20 total of 6 nights Food for 3 persons $252.00 total of 36 meals Loss of turnover $2800.00 for the week of closure Rent while floor damaged 1 week $250.00 (as a refund) Rent while closed 1 week $250.00 (as a refund) and we wish to apply for pecuniary damages to the maximum allowable as myself, my wife and my 14 year old son have suffered from a continuance of stress and upset since 24th October, 1995 right up to the 27th March, 1996 from builders noise, many uninvited visits and threats over the lease and the loss of our future security and including right up to this dated 17th August, 1996. $4,024.20 + Pecuniary Damages." It is apparent that the tenants claim compensation in respect of the whole of the leased premises, not only that part comprising the shop. The Tribunal holds that the "retail shop lease" covers the whole of the premises and that the 1984 Act enables the tenants to claim in respect of the whole. The dispute notice and the claim are to be dealt with in terms of section 15(1)a)(ii), (iii) and (iv) which read as follows:- "15.(1) In every retail shop lease (other than a periodic tenancy or tenancy at will) there shall be implied the following provisions- (a) the landlord is liable to pay to the tenant reasonable compensation for injury suffered by the tenant if the landlord, or a person acting under the landlord's authority, whether pursuant to a right so to do or not- (i) relocates the business of the tenant to other premises during the term of the lease or of any renewal thereof; (ii) inhibits in a substantial manner access by the tenant to the retail shop in which the tenant's business is conducted; (iii) takes action, other than that lawfully required by a department of government or statutory body, that substantially inhibits, or alters, access by customers to the retail shop in which the tenant's business is conducted, or the flow of potential customers past that retail shop; (iv) causes significant disruption of trading of a tenant in the retail shop in which the tenant's business is for the time being conducted, or fails to take all reasonable steps to prevent or terminate such significant disruption attributable to causes within the landlord's control;" -- 3 of 6 -- 4 Decision It is to be noted that the tenant's entitlement under Sec.15(1)(a) arises where the landlord does certain things "whether pursuant to a right so to do or not." Such a right can arise out of a covenant contained in the lease or be granted at a later time. In this matter, section 7 of the lease reserves to the landlord a right of entry to effect (inter alia) repairs. In terms of the 1984 Act, that section does not disentitle the tenants to compensation. Sub-paragraph (iii) does not confer a right to compensation where the action taken is lawfully required by a competent authority. Document No. 25 in the respondents' list of documents is a notice dated 12 September 1995 from Brisbane City Council to the respondents stating its requirements for approval of their application for Registration of a Multiple Dwelling (Tenement Building). Those requirements do not include the work performed in the retail shop. What was required was "(R)emove all mould from ceilings and/or repaint where necessary." Document 44 in the respondents' list of documents, a letter from the respondent to W & Associates, acknowledges that to be so, and goes on to set out the respondents' version of what work was done. The evidence does not show that there was a lawful requirement for the performance of the work carried out such as to prevent liability from arising under sub-paragraph (iii). The respondents assert that the extensive work in fact carried out was done with the consent and for the benefit of the applicants and at times to suit the convenience of the applicants as required by them. The applicants assert that they agreed that certain work should be done only when it became apparent that they could not re-open the shop otherwise. The terms of the 1984 Act are such that unquestioning acceptance of the respondents' evidence would not relieve them of liability for payment of compensation to the applicants, if the applicants otherwise have a sustainable claim under section 15(1)(a). Be that as it may, the Tribunal infers from all the evidence that the respondents were at least partly motivated by a desire to preserve for their own benefit a substantial capital asset. It is common ground that work was done on and to the leased premises whereby the landlords caused significant disruption of the applicant tenants' trading in the retail shop in which their business was for the time being conducted. The evidence does not establish that the respondents as landlords inhibited or altered access to the shop by the applicants or their customers by anything done outside the shop itself or that inhibited the flow of potential customers past the shop. The disruption to trading was caused by the respondent landlords' contractor over two periods of time, namely, 24 October 1995 to 30 October 1995 (Tuesday to and including the following Monday) and 30 October 1995 to 4 November -- 4 of 6 -- 5 Decision 1995 (i.e., the same Monday to the following Saturday) according to the dispute notice. Trading did not take place between the last-mentioned two dates according to the notice. The evidence shows a disagreement between the parties as to the actual dates on which the shop was closed, but it was closed for at least four whole days (Tuesday 31 October to Thursday 2 November 1995) and parts of the preceding Monday and the following Friday. The applicant tenants are entitled to compensation for those days and part days for complete loss of trade and to lesser compensation for the earlier period from 24 to 30 October 1995. The applicants referred in their material to section 43(1) of the 1994 Act, which has no application to their case but for the purposes of this dispute is the same as section 15(1) of the 1984 Act. Sub-paragraph 15(1)(a)(vii) of the latter Act, which corresponds with sub-section 43(1)(g) of the 1994 Act, to which the applicants drew attention, does not apply to this dispute. The applicants' occupation of the shop was interrupted, but they were not caused to vacate the leased shop within the meaning of that sub-section. As to the amount of compensation to which the applicants are entitled, the Tribunal has no jurisdiction to order payment of the pecuniary damages being the last item in the claim for compensation. That concept falls outside the scope of the compensation provisions of the 1984 Act. The claim for accommodation costs of $472.20 is disputed. The Tribunal holds that the claim is open to the applicants and allows it in part as part of the overall award of compensation. A claim is made for loss of turnover. In response to a question from the Tribunal, the applicants stated that they had lost a quantity of perishable goods, such as cakes and pies and fruit and vegetables. In the circumstances loss of turnover is not relevant but an allowance must be made for lost stock. Compensation for loss must relate to loss of gross profit, plus the allowance for lost stock. In response to a further question from the Tribunal, the applicants stated that their average gross profit at the relevant time was about $900.00 per week. In the absence of more precise evidence the Tribunal assesses the applicants' relevant loss of gross profit during the interrupted trading and loss of perishable stock at $1,750.00 overall. The respondent landlords admit the claim for food for three persons while the applicants were excluded from the premises and state that they have already credited the applicants with one week's rent amounting to $250.00. On the whole of the evidence it is clear that the respondent landlords made various concessions to the applicant tenants during the latters' term of occupation - for example, by foregoing rent increases. But those concessions -- 5 of 6 -- 6 Decision cannot be treated as or set off against the compensation to which the applicants are entitled under the compensation provisions of the 1984 Act. Having regard to all the circumstances disclosed by the evidence, the Tribunal orders the respondents to pay to the appellants compensation pursuant to section 15(1)(a)(iv) of the Retail Shop Leases Act 1984 amounting to $2,400.00. Payment must be made by 14 October 1996. A Couper, Chairman. -- 6 of 6 --