Dispute regarding quiet enjoyment of the premises
- More relevant is whether clause 18.3 of the JFR Licence permits USU to do as requested by the University and permanently close the sliding door.
- The applicant raises his right under clause 18.1 to quiet enjoyment of the premises and views the actions taken by USU as a breach of that right and consequently a breach of the JFR Licence. On a closer reading of clause 18.1 the Tribunal notes that it is in fact not an open right but a very limited right based on the usual 'subject to the licence while you comply with your obligations under this license you may … (have the right to quiet enjoyment)'. That is, the right is based on compliance by the applicant with all its obligations under the JFR Licence.
- Consequently, the second question arises as to whether the applicant was in breach of the JFR Licence and not able to avail itself of the right to quiet enjoyment given under clause 18.1. From the evidence provided by Mr Taylor in his affidavit annexing the Disclosure Statement and the development consent from Sydney City Council, it is quite evident that due to the fact that a commercial local exhaust system could not be installed in the premises the cooking equipment was limited to domestic gas stove, crepe maker and press toaster. Any other cooking apparatus was contrary to the development consent granted by Sydney City Council and also the consent to the applicant by the University.
- The Tribunal is satisfied that the applicant had in fact embarked upon cooking meat and onions within the premises contrary to the development consent and thus in breach of the JFR Licence. Such a breach by itself would disentitle the applicant to the benefit of the provisions of quiet enjoyment under clause 18.1.
- However, the Tribunal notes that the applicant has ceased cooking meat and onions. On the assumption that the applicant is proceeding in relation to its food preparation and sale of food in accordance with the JFR Licence and the development consent obtained from Sydney City Council, the question is can the applicant now take the benefit of the covenant for quiet enjoyment under clause 18.1.
- There appears to be an issue between the parties as to what 'cooking' means. USU and the University appear to take the position that no cooking can be done within the premises. This is clear from the submissions made by the applicant referred to in paragraph 15 of these Reasons. Mr Andrew Woodward at paragraphs 19 and 20 of his affidavit of 29 August 2016 refers to discussions with the applicant that there should be no cooking by the applicant in the premises (see paragraph 26 of these Reasons). I would have expected that crepes, which was part of the menu, are required to be freshly cooked and served and not reheated. The development consent from Sydney City Council refers to certain cooking apparatus being permitted such as crepe maker, gas oven and toaster, provided no odorous smells are emanated from the premises. I understand that some people might be sensitive to crepe smells but I would not consider such smells to be noxious or offensive.
- If USU and the University take the position that no cooking is permitted under the JFR Licence then the Tribunal views that position to be incorrect. As noted, clause 18.3 of the JFR Licence gives a right to USU to do work in the premises such as close off access to the common areas provided USU take reasonable steps to minimise interference with the business being conducted by the applicant. This clause follows the right to use the premises without interference contained in clause 18.1(a)(i).
- Accordingly, the analysis undertaken by AllsopJ in Byrnes v Jakana is most helpful, in particular paragraph 65. Allsop J places emphasis on the state of the premises at the time the grant was made. At the time the applicant took possession of the premises, the sliding door was not permanently closed. The applicant has indicated that the permanent closure of the sliding door has had a material effect on his business. There is now diminished utility of the open space and flow between the premises and the foyer of the JFR Building. There is a lack of visibility of the business and a reasonable belief that assumptions are made by potential patrons that on seeing the sliding door permanently closed, that the café may not be open and therefore patrons go elsewhere.
- Whilst a lot of these matters may be subjective and there is evidence, particularly from Mr Cowie, about sales figures and the fluctuating patronage consequently affecting those sales figures, nevertheless the photos produced by the applicant clearly show some visual and physical impact by USU (and the University) in closing the sliding door permanently. Allsop J clearly differentiated between the physical effect by the interference on the premises and ultimately what that effect may resonate in damages (see paragraph 68 of the judgment). There appears to have been no attempt by USU to minimise any interference with the business of the applicant when the sliding door was closed. Such non action does not seem to accord with the sentiments expressed by Mr Andrew Woodward when he states in his affidavit that USU approaches its dealings with licensees with professionalism, fairness, integrity and good faith.
- In this regard, the Tribunal is satisfied that when USU permanently closed the sliding door it did so not in compliance with clause 18.3(b)(i) because it did not take reasonable steps to minimise the interference to the business as a result of the door being permanently closed. Further, the Tribunal is of the view that USU is in breach of clause 18.1(a)(i) in that by closing the sliding door permanently, it has not provided to the applicant use of the premises without interference.
- It appears to the Tribunal that USU, in seeking to remedy the breach by the applicant of the JFR Licence in cooking meat and onions and causing offensive and noxious odours, undertook self-remedy by closing the sliding door, when instead a breach notice should have been issued. The breach notice would have required the applicant to cease cooking meat and onions, which the applicant has subsequently done. The breach notice could hardly have required the applicant to cease cooking altogether, which is what USU (and the University) appear to seek particularly in light of the discussions between Mr Woodward, the CEO, and the applicant, with regard to the settlement offer. [see paragraph 26 of these Reasons].
- In relation to damages, the Tribunal is not satisfied that any claim by the applicant has been properly articulated in this case. If the applicant wishes to pursue damages then the Tribunal will allow the applicant to restore the matter for the Directions Hearing after 28 days from the date of publication of these Reasons.
- Accordingly the Tribunal makes the following orders:
1. The 2.9 metre sliding door is not to be permanently closed.
2. Either party can restore this matter for Directions Hearing after 28 days from publication of these Reasons.
D Bluth
Senior Member
Civil and Administrative Tribunal of New South Wales
30 January 2017
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 01 March 2017