Cominos v Clearbridge Pty Ltd [1995] RSLT 8

1 ___________________________________________________________________________ [1995] QRSLT 8 RETAIL SHOP LEASES ACT In the matter of Dispute No 14 of 1995 THEODORE HARRY COMINOS - Claimants -and- CLEARBRIDGE PTY LIMITED and KIMCRA PTY LIMITED - Respondent Coram: P Loewenthal J (Chairman) Mrs L Peters (Member) Mr T Davies (Member) DECISION Given on 16 October, 1995 in Brisbane _____________________________________________________________________________ -- 1 of 7 -- 2 _ -- 2 of 7 -- Cominos-v-Clearbridge 3 Decision This is a claim for compensation by the lessee against the lessor of a retail shop in Paddington, Brisbane. The lease commenced on 18 July, 1994, and expires on 17 July, 1997, subject to any prior termination or cancellation. The compensation provisions have to be raised in the Retail Shop Leases Act, 1984, as the lease was entered into before the commencement of the Retail Shop Leases Act 1994. The main points of dispute as set out in the Notice of Dispute filed in the Registry on 13 April, 1995, are: 1.Failure to maintain toilet facilities in a clean and hygienic fashion and to make necessary repairs; 2.Failure to replace greasetrap door and generally to maintain the greasetrap to prevent escape of fluids; 3.Failure to maintain drains and pipes in and around the premises, with a result that the premises are periodically flooded with tainted fluids and other filth which has penetrated beneath tiling on the floors and causing a build up of bacteria and the release of a stench. Apart from the periodic disruption to the business being conducted at the premises by the flooding, the stench has detrimentally affected the lessee's business by causing a substantial decline in customers. 4.Generally, failure to prevent surface flooding which penetrates the premises during periods of heavy rain. The lease is in fairly standard terms. The following clauses are of relevance: 9.03Suitability of Premises. The lessor does not expressly or impliedly warrant that the demised premises are at the date of the commencement hereof or remain fit, suitable or adequate for all or any of the purposes of the lessee, and all warranties (if any) as to the suitability, fitness and adequateness of the demised premises implied by law are hereby expressly negated. -- 3 of 7 -- Cominos-v-Clearbridge 4 Decision 9.04Assumption of Lease by Lessee. The Lessee agrees to occupy and use the demised premises at the risk of the lessee, and the lessor shall not in any circumstances .... be liable to the lessee for any damage to the plant, equipment, fixtures, fittings, merchandise, stock in trade, or any other property of any description .... contained in or about the demised premises occasioned by water ... or by the entry of water from any source whatsoever ... nor for any loss of profit resulting therefrom. These provisions are subject to the terms implied in Section 15(1) of the Retail Shop Leases Act of 1984. The relevant provisions of that section read: In every retail shop lease (other than a periodic tenancy or tenancy at will) there shall be implied the following provisions - (v) Fails to have rectified as soon as is practical - (B) Any defect in the building that is or contains the retail shop ... except a defect due to a condition of the building or common area that would have been apparent to the tenant upon the exercise of reasonable diligence at the time the tenant entered into the retail shop lease; (vi) Neglects to clean, maintain, or repaint such part as is the landlord's responsibility under the retail shop lease of the building that is or contains the retail shop, or of common areas. The business conducted in the retail shop is that of a butcher. Evidence put before us is that the shop is in a low-lying area and subject to periodic flooding during heavy rain. Steps have been taken to prevent rain entering the shop by the construction of concrete sills some 20 cm high at the base of the rear doors. These sills have been photographed, and it is obvious to us that the reason for their construction is that stated above. We take the view that any reasonable tenant, on inspecting the premises, would have been aware that there was a risk of periodic, although probably only occasional, flooding due to rain water rising above the level of the sills which had been constructed. On the second of June, 1995, that is, nearly seven months after the lease commenced, heavy rain fell. The common area at the rear of the butcher shop -- 4 of 7 -- Cominos-v-Clearbridge 5 Decision was flooded and water entered the butcher shop from the rear. Ponding continued in the common area at the rear, and in order to drain this ponding, a Mr Shanks, who was employed by the claimant, removed a manhole cover in the common area. This manhole cover was over a sewerage drain. The ponded water flowed into this water. A suggestion has been put to us that the effect of removing the manhole cover was to allow surface debris to enter the sewerage drain, including a three feet long piece of timber. In any event, as appears hereunder, a three feet piece of timber was subsequently found in the sewerage drain. Whether it entered when the manhole cover was removed, or whether it was deliberately used to remove a blockage downstream from the manhole cover and then allowed to remain in the drain, is a matter of conjecture. However, it is not necessary for us to decide on the view we take of the facts. On being advised by Mr Cominos that water had entered the butcher shop, Mr Pilot, the representative of the respondent landlord, asked Mr Cominos to telephone the Brisbane City Council's Sewerage Department and advise them of the problem, so that they could investigate and fix it. Mr Pilot followed this up, to inquire what had caused the flooding of the butcher shop. Subsequently, Mr Pilot spoke to a Mr Klose, the plumbing inspector employed by the Brisbane City Council, and was advised that the problem was a one off occurrence. In any event, Mr Pilot had reacted without delay, and the matter had been rectified very quickly. Some water had entered the rear of the butcher shop and may have caused some dampness and resulting smell at the rear of the butcher shop. There is nothing to indicate that this was the subject of a complaint at that stage, from Mr Cominos to the respondent's agent. It is stressed that the first entry of fluid into the butcher shop was caused by rain. On the first of April, 1995, the tenth of April 1995, and the second of May, 1995, there were again incidents of flooding. The cause of this flooding was not rain water, but back up of fluids through the sewerage system. On each occasion, Mr Pilot was advised and promptly attended to or arranged for remedial work to be done without delay. On each occasion, the cause of the flooding was found to be a blockage brought about by foreign matter in the sewerage system. On the first of April, the foreign matter was rags, string, plastic bags, steel wool and socks in -- 5 of 7 -- Cominos-v-Clearbridge 6 Decision the drain. On the tenth of April, a report of flooding was again promptly attended to. Again, the cause was foreign matter in the drain. On the second of May, 1995, the cause of the blockage was found to be plastic bags, paper towels, and a piece of timber. Remedial work was completed on the third of May, 1995. There had been no history of sewerage blockage before the first of April, 1995. The expert evidence before us is that the foreign material, other than the piece of timber, could have entered the sewerage line from premises upstream from the butcher shop. The piece of timber could not have followed the same route, as there were two right-angled bends in the sewerage line before it entered the respondent's premises. The piece of timber could only have entered the sewerage system through the manhole in the common area at the back of the butcher shop, being the manhole which Mr Shanks had removed. Whether it entered at the time when he moved the manhole or at some other time is, as stated above, merely conjecture. The suggestion by Mr Cominos, based on the general appearance of the timber when removed, that it had been in the system for a long time, is equally indecisive. Under the provisions of the Act, the liability of the landlord is based on failure to rectify defects as soon as is practical. The evidence in this case is that the defects were remedied as soon as was practical in the circumstances. In any event, the maximum period between the advice of the defect and its being remedied was a maximum of two days. There is evidence of a persisting smell which continued after sewerage entered the premises on the tenth of April, 1995. Mr Pilot has given evidence that the first complaint to him was on the twentieth of April, 1995. The material with respect to the quantum of the claim indicates a decrease in turnover going back to, at the longest, February 1995. There is no evidence of any complaint of a smell at that stage, and the probabilities of any sort of substantial smell are not great, as the flooding was then by rain water. With regard to the subsequent smell after Mr Pilot was advised on the Twentieth of April, 1995, we are satisfied that he took reasonable steps by seeking advice and assistance from the Brisbane City Council inspectors and from a plumber who investigated the cause of the -- 6 of 7 -- Cominos-v-Clearbridge 7 Decision smell and to prevent it recurring or to mitigate it. We therefore find that the claimant has not proved grounds for compensation based on flooding or sewerage water damage. With regard to points 1 and 2 of the grounds set out in the Notice of Dispute, without going into these in any depth, we are satisfied that if there was any failure to maintain toilet facilities in a clean and hygienic fashion or to make repairs, and the failure to replace the greasetrap door and maintain the greasetrap, have not been shown to be in any way related to downturn in turnover or loss of profit. The same applies to a complaint relating to the failure to provide adequate lighting in the common area which was made during the proceedings, and not in the Notice of Dispute. As the claimant has not made out a valid claim, we do not find it necessary to investigate whether the landlord has terminated the lease. The claim is dismissed. ------------------------- -- 7 of 7 --