Zenya Group Pty Limited v Leilei [2011] NSWADT 149 (5 April 2011)

Last Updated: 23 June 2011

Administrative Decisions Tribunal New South Wales

Case Title:	Zenya Group Pty Limited v Leilei
Medium Neutral Citation:	[2011] NSWADT 149
Hearing Date(s):	15 February, 8 March and 5 April 2011
Decision Date:	05 April 2011
Jurisdiction:	Retail Leases Division
Before:	D Bluth, Judicial Member
Decision:	1.The Applicant is to pay to the Respondent the full amount of rates and charges for Sydney Water from the commencement of the Lease, namely 3 March 2010. 2.The Respondent is to pay to the Applicant damages for the water leak causing loss to the Applicant's business, replacement of dishwasher and refrigerator per invoices for such replacement items, plus the costs of an electrician and any food deterioration and loss of business, less any moneys received by the Applicant from his insurer, provided further that the Applicant is to prosecute such insurance claim vigorously on the basis that the Applicant should be compensated by the insurer for the losses. 3.Should the parties fail to agree on the total amount of compensation to be paid within 40 days of today's date, then either party may seek to relist this matter before this Tribunal for further adjudication. 4.The Tribunal notes that the Respondent has confirmed to the Applicant that should the Applicant wish to surrender the Lease, the Respondent will allow the applicant to do so provided the Respondent has given 75 days' notice and rent and all other arrangements between the parties are resolved up to the date of surrender of the Lease.
Catchwords:	Damage to Premises, Legal Costs
Legislation Cited:
Cases Cited:	Martin's Camera Corner Pty Limited v Hotel Mayfair Ltd (1972) 2 NSWLR15
Texts Cited:
Category:	Interlocutory applications
Parties:	Zenya Group Pty Limited (Applicant) He Lin (Respondent) Amber Leilei (Respondent)
Representation
- Counsel:
- Solicitors:	Yariv Rozen (Applicant, agent) Amber Lei Lei (Respondent in person)
File number(s):	115003
Publication Restriction:

REASONS FOR DECISION

1. The Applicant, Zenya Group Pty Limited is the Lessee from He Lin & Amber Leilei, the respondent in respect of a lease for three years of premises 127 Avoca Street, Randwick commencing 3 March 2010 and terminating 2 March 2013 (the Lease).

Water Damage

2. The Applicant claims damages as a result of water penetration from the first floor of the premises to the ground floor of the premises where the Applicant operates a restaurant. Such damages includes loss of business, physical loss to equipment such as an industrial dishwasher, two door stainless steel refrigerator and motor, electricity, power blackout clean up expenses and loss of business.

3. The Respondent denies liability to the Applicant. The Respondent alleges that the water damage was created by the Applicant through excessive cleaning of the upstairs area and that the Applicant did not have Council approval to operate part of the restaurant from the upstairs area.

4. It is well founded law that the Respondent is responsible to keep the premises it leases to the Applicant in proper order and repair and not to allow leakage. This is consequent upon the covenant of quiet enjoyment, either stated expressly in the lease or implied as a lessor covenant.

5. I draw the parties' attention to the case of Martin's Camera Corner Pty Limited v Hotel Mayfair Ltd (1976) 2 NSW LR 15 where the Lessee suffered damage through the overflow of water caused by the blockage of drains on the roof, for which the Lessor was responsible, and which substantially interfered with the Lessee's enjoyment of the leased premises and damaged the Lessee's stock. The Lessee was successful in the claim for damages.

6. Whilst the evidence in this matter is clear that there was water damage and the Applicant suffered loss, the Respondent maintained the loss was as a result of the Applicant's over zealous cleaning of the upstairs area which the Applicant used as ancillary to the restaurant business for which the Applicant did not have Council approval. Nevertheless, the evidence shows that the Respondent, through its former solicitors granted the Applicant permission to use the upstairs area in conjunction with the restaurant business from time to time. In my view cleaning (whether over zealous or not) of the upstairs area is a necessary part of maintaining the whole premises.

7. An issue arose in the hearing as to whether the Applicant is covered by insurance and the Applicant indicated that it had an insurance policy for loss of business and was dealing with the insurance company.

8. The Applicant produced invoices and receipts in relation to replacement of the commercial dishwasher and refrigerator plus the cost of the electrician and cost of food deterioration. The quantum of the invoices were not challenged by the Respondent.

Water Rates

9. The Respondent claims from the Applicant payment of the water rates.

Special Condition 1 of Annexure A of the Lease states as follows:

The Tenant is responsible to pay for any electricity, power, fuel, gas, oil or water, telephone, garbage removal, waste disposal and other services and utilities provided by public, local of other authorities or suppliers to the leased premises and charged separately in respect of the leased premises, to the supplier of the service or utility.

10. Accordingly, it is clear from the terms of the Lease that the Applicant is responsible for the full cost of the water charges including the service and use charges.

Repairs to the Premises

11. The Applicant complained vigorously regarding repairs to the premises that were not done or done unprofessionally, such as the roller shutter door not being properly maintained, the stairs being slippery and a wall not being properly repaired. I note that the repairs have now been attended to.

Legal Costs

12. The Respondent also claims legal costs from the Applicant. This matter originally arose because the Applicant stopped paying rent and the Respondent endeavoured to lock the Applicant out. The Applicant then proceeded by way of original decision for an injunction to restrain the Respondent from denying the Applicant access to the Premises. That injunction was granted and the Applicant was allowed back in to the Premises to operate the restaurant business and the dispute continued before this Tribunal.

13. The reason that the Applicant stopped paying rent was, according to the Applicant, the fact that the Applicant's complaints regarding water damage and unattended repairs to the premises were being ignored by the Respondent. Further, the Applicant says that the Respondent did not clearly acknowledge to the Applicant responsibility for the repairs and delayed attending to the necessary repairs, The Applicant then told the Respondent that the Applicant would only deal with a legal representative of the Respondent, hence the Respondent incurred legal costs by having to engage a solicitor.

14. While this Tribunal does not approve of the actions of the Applicant in stopping the payment of rent and further only dealing with the Respondent through the Respondent's lawyers, the Applicant was successful in bringing the matter to a head and having the Respondent before the Tribunal for adjudication and attending to a number of the repairs. Both parties are at fault in this matter and the Applicant says that the Applicant has incurred legal costs as well. Consequently I do not believe that the Applicant is responsible for the Respondent's legal costs and I deny that aspect of the claim.

The Hearings

15. Throughout the hearings both the Applicant and Respondent have been self represented and at certain times both Respondents and the Applicant all spoke at the same time, notwithstanding repeated requests to desist, which makes adjudication of the dispute very difficult for this Tribunal.

Ultimately I was able to hear what they were saying and was able to come to an understanding of the issues that needed resolution between the parties.

16. Further, I note the fractious relationship between the Applicant and the Respondent. I have indicated to the Respondent that the Respondent would be best served by the appointment of a managing agent to deflect the barrage of enquiries and complaints from the Applicant and to best represent the Respondent. I understand that the Respondent has now so appointed a managing agent. Nevertheless, I note that the Respondent has confirmed that should the Applicant wish to surrender its Lease, then upon proper notice the Respondent will allow the Applicant to do so provided that the Applicant has performed all its obligation under the Lease, including payment of rent and outgoings. In this regard, I recommended that 75 days notice be the requisite notice the Applicant might give to the Respondent of notice to surrender and this has been accepted by the Respondent as sufficient notice.

Orders

1. The Applicant is to pay to the Respondent the full amount of rates and charges for Sydney Water from the commencement of the Lease, namely 3 March 2010.

2. The Respondent is to pay to the Applicant damages for the water leak causing loss to the Applicant's business, replacement of dishwasher and refrigerator per invoices for such replacement items, plus the costs of an electrician and any food deterioration and loss of business, less any moneys received by the Applicant from his insurer, provided further that the Applicant is to prosecute such insurance claim vigorously on the basis that the Applicant should be compensated by the insurer for the losses.

3. Should the parties fail to agree on the total amount of compensation to be paid within 40 days of today's date, then either party may seek to relist this matter before this Tribunal for further adjudication.

4. The Tribunal notes that the Respondent has confirmed to the Applicant that should the Applicant wish to surrender the Lease, the Respondent will allow the applicant to do so provided the Respondent has given 75 days' notice and rent and all other arrangements between the parties are resolved up to the date of surrender of the Lease.





I hereby certify that this is a true and accurate record of the reasons for decision of the Administrative Decisions Tribunal.





Registrar