Bowtell v Suncorp Insurance and Finance; McIntosh v Suncorp Insurance and Finance; v Wendt v Suncorp Insurance and Finance; Fleming v Suncorp Insurance and Finance [1990] RSLT 7

1 [1990] RSLT 7 RETAIL SHOP LEASES ACT 1984-1990 IN THE RETAIL SHOP LEASE TRIBUNAL QUEENSLAND HELD AT BRISBANE REFERENCE NOs - 24/89, 26/89, 27/89 and 28/89 BETWEEN ELWYN BOWTELL AND ELIZABETH ANN BOWTELL (CLAIMANTS) AND SUNCORP INSURANCE AND FINANCE (DEFENDANT) AND BETWEEN BRENDA OLWYN MC INTOSH (CLAIMANT) AND SUNCORP INSURANCE AND FINANCE (DEFENDANT) AND PATRICIA WENDT (CLAIMANT) AND SUNCORP INSURANCE AND FINANCE (DEFENDANT) AND THELMA MAUD FLEMING (CLAIMANT) AND SUNCORP INSURANCE AND FINANCE (DEFENDANT) These four matters were heard together. In each matter the claimant delivered points of claim which were in similar terms except for the history and the amount of the claim for damage and loss of profit. Particulars of the claims are set out as follows: During a period commencing 1986 to the 30th September 1988 the following cleaning was not carried out - (a)Common areas were not cleaned other than as a spot clean. (b)Toilets were not properly cleaned and cigarette ash and butts were not cleaned away. (c)Toilets were smelly and deodorant blocks were not used in urinals. (d)Toilets were not cleaned daily. (e)Wash basins and toilets were dirty and soap was not available. (f)The common area ceilings were dirty from maintenance being carried out on airconditioning and lights. (g)Cobwebs were not cleaned from common areas especially in the area adjacent to the east street entrance. (h) The airconditioning register outlets were black with soot including the areas adjacent to them. (i)Outside the hot bread shop the entire ceiling area was discoloured with grease from the ovens in the hot bread -- 1 of 6 -- 2 shop. (j)The grouting around the floor tiles over the common area had broken away in many places and dirt accumulated in the cracks. (k)Seats in the common areas were stained and were not cleaned for long periods. (l)Rubbish was stuffed between slats of the seats. (m)Until the installation of the fibreglass pot plant boxes wooden plant boxes were used as rubbish boxes and were not emptied. (n)There was no cleaning behind the wooden plant boxes. (o)The paint work of the centre was in a dilapidated condition. (p)Repainting of the centre was carried out in some areas but was carried out in a sub-standard way. (q)The outside of the building was water stained and was stained from traffic soot and bird droppings. (r)Windows of vacant shops were dirty. Electrical: (a)Fluorescent tubes were blown out and were not replaced in many cases for up to eight years. (b)Lights under the awnings and at the entrances were covered with cobwebs, have diffusers missing or broken and were discoloured and burnt resulting in the centre being dull for Thursday night shopping. Lifts: (a)The interiors were in a run down condition. (b)Wall coverings were torn. (c)Lifts not maintained in a clean condition. Toilet hand dryers: (a)Most were removed and not replaced. (b)No hand drying towels provided. (c)Remaining hand dryers frequently not in working condition. Gardening: (a)The external shrubbery not maintained. -- 2 of 6 -- 3 (b)Planter boxes inside centre not maintained. Pest Control: (a)No pest control around lifts and garbage bin areas. (b)Rats and mice present in back alley areas. (c)Pigeons and swallows flock in car park entry. (d)Dead birds often found and not removed. Common Floor Areas: (a)The colour of the tiles and the drab lighting give a poor welcoming appearance to the centre. (b)Expansion joints in the floor are so wide that women's shoe heels get caught causing women to fall. (c)Numerous tiles are broken. (d)Kick board tiles have come off the walls and have not been replaced. (e)Steps leading to the highrise office block are in a poor condition and present a hazard to users of them. (f)In the entry to the west mall the tiles are of a slippery nature and present a danger in wet weather. Empty shops: (a)The paper on the windows of empty shops falling off. (b)The front of the empty shops is unkept and untidy. It was alleged that in breach of the defendant's obligation to make reasonable efforts to prevent or to remove any disruption of trading within the Centre the defendant accepted the surrender of sub-leases before the expiry date. This ground was abandoned during the hearing. The period covered by the claims is from 1st January 1986 until September 1988 when Suncorp sold the Ipswich Centre Plaza to the Kern Corporation. The Retail Shop Leases Act of 1984 was substantially amended by Act 43 of 1988. That latter Act came into force when it as assented to on 3rd May 1988. Under Section 15 of the Act as it read in 1986, there was an implied provision that the landlord was liable to pay to the tenant reasonable compensation for injury suffered by the tenant if the landlord: - (iv)causes or fails to make reasonable efforts to prevent or to -- 3 of 6 -- 4 remove any disruption to trading within the Centre which disruption causes loss of profits to the tenant or tenants in the Centre; and (vi)neglects to adequately clean, maintain or repaint th building or buildings which constitute the Centre including common areas. The post 1984 amendment provision clarifies the position by stating that the landlord's liability to compensate includes acts by a person acting under his authority. The Chairman rules, as a matter of law that he does not consider that the amendment changed the effect of the Act. The common law is that a person is liable for acts done by his agents and had the matter come before this Tribunal in 1986, the Chairman, would have had no hesitation in ruling that the defendant was liable for the acts or omissions of its servants or agents. The Tribunal has come to the conclusion, on the balance of probability, and accepting that the onus of proof is on the claimants, that the defendant failed to adequately clean the common areas of the building. We find that the general standard of cleaning was not reasonably adequate taking into account the peculiarities of the building. The building was designed in the mid-1970s and required a high standard of cleaning. We find interalia that hallways were left for varying periods in an untidy state, that toilets were not properly cleaned and were left odorous, that the ceilings were left dirty from maintenance and that cobwebs were not cleaned from common areas, that air- conditioning outlets were inadequately cleaned and the seats were left untidy for excessive periods and that the windows of vacant shops were left in a dirty or untidy condition. We further find that ceiling light tubes were not replaced when they stopped working or cleaned at regular intervals. With regard to empty shops, we divide these into two categories. The first category contains those shops that the tenants vacated but where they continued to pay rental. These shops were left unkempt and untidy. We find that the defendant should have taken steps to compel the tenants, although no longer in occupation to tidy up the shops and to cover the windows tidily. With regard to shops vacated by tenants, we find that these were left in an untidy condition and that the defendant should have, although its agents tidied them up. The reasons for these findings of fact are based mainly on credibility, and received support from our inspection of the areas, taken with the evidence of Mr Pearce, one of the defendant's witnesses, that the standards generally were at the inspection in substantially the same condition as they were in the years 1986-1988. The Ipswich Centre Plaza was built over the railway line in the central business district of Ipswich. Building work was completed in late 1979. The Centre was never fully occupied, -- 4 of 6 -- 5 but some tenants maintained successful businesses. The Centre was never designed to accommodate and in fact never had among its tenants a major retailer. There was a deal of evidence before us that a major retail tenant draws custom to the shows in the vicinity. It appears to us that the major drawcard with regard to the Central Business District (CBD) were Reids Department Store and Woolworths. These provided the "anchor" tenants for the area and shoppers coming to them would visit neighbouring shops or shopping centres including the Ipswich Centre Plaza in order to make purchases from speciality shops. This position changed substantially in August 1985 when Reids Department Store burnt down. A further change occurred when a large shopping centre opened at Redbank Plaza in September 1985, some 11 kilometres from the Ipswich CBD. Further changes occurred when Woolworths closed down its business in the CBD and a further shopping centre opened known as Westway. The latter included a Franklins store as its anchor. We accept that the burning down of Reids, the opening of the Redbank Plaza and the new Westway shopping centre caused a substantial drain of customers to the Ipswich CBD. In the absence of a long-established and well-patronised department store and the closure of a major food store in the CBD, the natural path for shoppers was to proceed to Redbank where all their shopping could conveniently be done. The position of the tenants of the Ipswich Centre Plaza was made worse by massive construction in the Ipswich CBD over the years 1986-1988. The wreckage of the Reids store was removed, construction of a mall in Nicholas Street was commenced and generally there was much construction involving earthmoving machinery and construction workman and plant. This must inevitably have deterred further shoppers from entering the Ipswich CBD and it detracted from the businesses which the claimants conducted. This was not the end of the claimants' woes. In December 1986 there was major reconstruction to the Booval Fair shopping centre, where a Big W was installed. In mid-1987 a further shopping centre was opened known at St Ives. We refer to the failures of the defendant to properly carry out its obligations as the "internal factors". We refer to matters which occurred outside the Ipswich Centre Plaza as the "external factors." We are satisfied that each of the claimants suffered loss of turnover and loss of profits (with the exception of Mrs McIntosh who had a temporary increase in turnover following lack of trading opposition from Reids) during the period of the claim. The difficulty which we have is in assessing what proportion of the loss of profit was due to internal or external factors. We are satisfied that the external factors were much more important than internal factors. We have been provided with a valuation by a Mr Taylor in respect of another business in the Centre (not being a claimant now before us) where he had adopted the figure -- 5 of 6 -- 6 of 20% as being due to the internal factors. We do not know on what basis he acted. It seems to us that this figure is mere guesswork. Counsel for the defendant has requested the Chairman as a matter of law, to direct that there is no evidence on which the Tribunal can properly assess what proportion of the loss, if any, is due to internal factors. The Chairman has declined to do so, leaving it for the Tribunal as a whole to decide whether there is a totality of evidence on which it can act. The Chairman's ruling is that it is not appropriate in a Tribunal of this nature to make directions on questions of fact, especially as the Tribunal has a duty to inform itself. Professional witnesses including Mr Allen who was called on behalf of the claimants. Mr Allen has not attempted to establish any basis of apportionment. Mr Calabro who was called on behalf of the defendants stated that the material produced was so imprecise that he could not apportion but that it, if anything, showed no loss was due to internal factors. They are therefore of no assistance to the Tribunal in this regard. We have considered whether Mr Taylor's figure should form some form of basis for an apportionment to be adopted by the Tribunal. In the absence of any indication as to how he arrived at the figure of 20%, we feel that he has not given us a foundation on which to build. In the absence of other evidence we find ourselves incapable of apportioning the loss between internal and external factors. We have firmly come to the conclusion that the external factors were the predominant cause of any loss suffered by the claimants and may well be close to the total cause of their loss. With regard to claims of loss of goodwill, we are satisfied that none of the businesses was in a viable form when Suncorp sold the Plaza. They would not then have had any saleable value. The reason for the businesses not being viable was not shown to be anything but the external factors. We have briefly considered, but not come to any agreement on the loss of income suffered by each of the claimants over the period of the claim. In the light of our view of the failure by the claimants to prove what loss if any is the responsibility of the defendant, we regard this exercise as purely academic. The order of the Tribunal is that each claim is dismissed. ------------ -- 6 of 6 --