Bridson v Relf

[2021] NSWCATCD 114

NCAT Consumer and Commercial|2021-04-28

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Source facts

Court

NCAT Consumer and Commercial

Decision date

2021-04-28

Source

Original judgment source is linked above.

Judgment (60 paragraphs)

[1]

Application

This dispute arises out of an agricultural tenancy agreement between the applicant lessee and the respondent lessor for the lease of a farm in Gloucester. The agreement commenced on 1 November 2017 for a term of 5 years with a 5-year option. The lessor's son Stephen Relf represented the lessor in her dealings with the lessee.
By February 2019 the parties had fallen into dispute. Each alleged that the other was in breach of his or her obligations under the agreement. A meeting was held on 16 February 2019 and some agreement was reached. However, that agreement was not implemented, and on 9 July 2019 the applicant's lawyer wrote to the respondent, raising alleged breaches of the agreement in respect of removal of stock, the MidCoast Water System, the bike shift irrigation system, boundary fencing, and removal of rubbish.
Further attempts were made to resolve the issues without success. On 6 May 2020 the lessor's lawyer gave a notice of breach in respect of alleged failures to apply fertiliser, control weeds, maintain the irrigation systems and observe the 5-day cattle withholding period. On 4 August 2020 by letter from her lawyer to the lessee's lawyer the lessor served what she alleges to be a notice of termination. She claims that the lease was terminated by that notice.
The lessee disputes that he is in breach, disputes that there was a termination notice served, and disputes that the lease has been terminated. He has remained in occupation.
Both parties claim to be entitled to compensation.

[2]

[12]

Stephen Relf

Stephen Relf is the lessor's son. I found him to be an evasive witness. He frequently failed to answer questions put to him in cross examination and had to be reminded to do so on several occasions. He gave conflicting evidence about his role in the arrangements between his mother and Mr Bridson, initially agreeing when it was put to him by his solicitor Mr Barraclough "your mother left it to you to deal with matters relating to the lease with Mr Bridson" "Yes" but later insisting that he didn't know whether the initial inspection report had been completed because he had only been advising his mother. It is clear from the various emails in evidence that Mr Relf was giving instructions to Gary Ferris on his mother's behalf, was attending meetings with Gary Ferris and the lessee and was doing much more than simply advising his mother during the first 2 years of the lease. In re-examination, he agreed with his solicitor's proposition that his role was to oversee the performance of the lease conditions, but the general impression was that he was attempting during cross examination to minimise his involvement in the lease.
Mr Relf was also evasive in his answers to questions about whether Mr Bridson had been given a copy of the MidCoast Water agreement. He agreed that Mr Bridson had not been given a copy but continually qualified his answers, stating that "he hadn't complied with the withholding period which I think is stated in the lease" (it isn't), that at meetings the terms had been explained to Mr Bridson, that he had a section of the agreement handed to him at the November meeting, that he had been given one page "to demonstrate the end user", but that he (Mr Relf) had never maintained that because of the terms of the agreement with MidCoast Water, it was not possible to hand over control of the system to Mr Bridson.
Further, Mr Relf was evasive in his answers to questions about the weight of a standard bag of super. He initially answered "2 bags is 250 kg to the acre", then said "50kg", then said "The last bag I bought was 1000kg". When the question was put again "What is the standard weight of a standard bag?" he said "it says 2 bags of single super to the acre there's nowhere stated in there anything about standard". Across more than a dozen questions, Mr Relf gave varying answers. I was left with the impression that he was being deliberately evasive and answering questions in a way which he felt would advance his case.
I have considered that there were severe difficulties in the audio quality during Mr Relf's evidence, but I am not satisfied that his answers were affected by those difficulties. When asked questions by his own lawyer in examination in chief and re-examination, Mr Relf appeared to have no difficulty in answering, but during cross examination, he appeared to be intent on arguing his case rather than directly answering the questions.

[13]

The written agreement

The written tenancy agreement comprises 3 pages, and was prepared by the managing agent Gary Ferris of Webbs Real Estate Gloucester. It is more akin to a heads of agreement document, with no standard terms or conditions usually found in a lease document. It relevantly includes the following: "1 The property comes with a 15 year, water entitlement contract with Mid Coast Water (a) Approximately $1.5 million in irrigation infrastructure has been installed. (b) It services lots 398, 401 and approximately 60% of lot 400 (c) The system is fully automated and controlled via the internet (d) It includes a 255 mega litre effluent re-use allocation of which the property is obliged to take at least 25% annually. (e)The infrastructure belongs to the landlord and includes power for 7 years at no charge a 15 year water entitlement and then power for years 8 - 15 at MidCoast Water's concessional rate. (f) The obligations and conditions of this agreement will need to be complied with as a component of the overall lease agreement. (g) Operations of effluent Re Use system has not yet been fully commissioned and signed off by the Land Owner, Mid Coast Water and Gosford Irrigation. (h) Stephen Relf agrees to assist the Lessee with the desired water applications and organise it in his behalf until the Lessee has familiarised himself with the operations of the farm and irrigation system and the Effluent Re-use system is fully commissioned. 2 The property comes with a water license that services bike shift irrigation on lots 3, 412, 399 and part lots 400 and 20. 3 A 40 HP pump on the river supplies water to the bike shift irrigation. The pump is powered by 3 phase electricity and is separately metered. " Lessee responsibilities (ii) The Lessee accepts the property in the condition it was in when inspected on 24/09/2017. (iii) The Lessee acknowledges it is their responsibility to control weeds over the duration of the lease (iii) The Lessee will apply a minimum 2 bag/acre (432 bags) of single super annually. (vii) The maintenance of internal fences is the responsibility of the lessee. (viii) The lessee shall be responsible for maintaining the pump in good working order. If the pump breaks down the lessee is responsible for its repair. In the event of flood the lessee is responsible for moving the pump out of the flood zone. (ix) The lessee shall be responsible for maintaining the bike shift irrigation system in good working order. Repairs and maintenance of this irrigatiom system are the responsibility of the lessee. (xi) The lessee will not restrict access to the excluded houses or the right of carriageway to Lot 21. Boundary fences Boundary fences will be maintained by the Land Lord (Lessor) From time to time the Lessee may be required to do on the spot repairs to boundary fences, The Land Lord will supply the materials for the temporary repair. The Land Lord will subsequently make a permanent repair at their earliest convenience (within one month from the repair being reported), All materials required for boundary fencing repairs will be provided by the Land Lord"

[23]

The bike shift system

The agreement provides for the lessee to maintain the pump and the bike shift system in good working order. It further states that the lessee is responsible to maintain this system in good working order. "Maintain" is defined in the Macquarie Dictionary as 1. to keep in existence or continuance; preserve; retain: to maintain good relations with New Zealand. 2. to keep in due condition, operation, or force; keep unimpaired: to maintain order; maintain public highways. 3. to keep in a specified state, position, etc. 4. to affirm; assert (with a clause, or with an object and infinitive): maintain that it is right; maintain it to be true. 5. to support in speech or argument, as a statement, etc. 6. to keep or hold against attack: to maintain one's ground. 7. to provide with the means of existence.
The question as to how an obligation such as the obligation to "maintain and repair" or to "maintain the pump in good working order" is to be understood is the subject of many decisions. In Pipeclay Lawson Ltd v Brand Ventures Pty Ltd [2021] NSWSC 909 the Supreme Court discussed the general principles: "49 In Proudfoot v Hart (1890) 25 QBD 42 Lord Esher MR, with whose reasons Lopes LJ agreed, referred to Payne v Haine (1847) 16 M&W 541; 153 ER 1304 where the contract was to keep premises in "good repair", the expression used in clause 13.1(a). His Lordship said that that is "much the same thing as 'tenantable repair'" (at 51). 50 In Payne v Haine Baron Parke said (at 545, 1306) that the age and class of the premises let with their general condition as to repair at the commencement of a lease must be estimated in order to measure the extent of repairs to be done where there is an obligation to keep old premises in good repair. The plaintiff does not dispute this principle. 51 In Butt's Land Law 7th ed (Professor Edgeworth) Law Book Co 2017, the learned author says (at [7.840]): "The standard of repair required under a covenant to repair is a matter of construing the terms of the covenant. Every word of the covenant must be considered, construed in the context of the other provisions of the lease (Anstruther-Gough-Calthorpe v McOscar [1924] 1 KB 716 at 731-732; Bonafair Holdings Pty Ltd v Hungry Jacks Pty Ltd [2016] NSWCA 276). For example, a covenant to keep in 'good and substantial repair' may impose a higher standard than a covenant simply to keep in 'good tenantable repair' (Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349); and a covenant (in a plain language lease) to maintain in 'good condition and repair' may impose a higher standard than a covenant simply to keep in 'repair', since 'good condition' may be a separate concept from, and add significantly to, 'repair' (Welsh v Greenwich London Borough Council [2000] 49 EG 118 (CA), noted [2001] Conv 184, as interpreted in Lee v Leeds City Council [2002] 1 WLR 1488 at [61]) … The required standard of repair depends on many factors. They include the following: the nature of the building; the terms of the lease; the state of the building at the start of the lease; the nature and extent of the defect sought to be remedied; the nature, extent and cost of the proposed remedial works, and at whose expense they are to be undertaken; the value of the building and its expected life span, and the effect of the works on that value and life span; current building practices; the likelihood of a recurrence if one remedy rather than another is adopted; and the comparative cost of alternative remedial works and their impact on the occupants' use and enjoyment of the building (Holding and Management Ltd v Property Holding and Investment Trust Plc [1990] 1 EGLR 65 at 68-69, adopted in Eyre v McCracken (2000) 80 P & CR 220)."
The agreement, when read in its entirety, implies that the irrigation equipment was in working order. The agreement states that the property comes with $1.5 million worth of irrigation infrastructure which "services the lots" referred to. The 40HP pump "supplies water to the bike shift irrigation system and is separately metered and powered by 3 phase electricity". The obligation to repair the pump is stated to be "if the pump breaks down".
However the lease clearly provides that the lessee accepts the property in the condition it was in, and that he has an obligation to maintain the pump and the system in good working order. According to Mr Tobias, it was obvious that the system was not in working order. The lessee was obliged by the terms of the lease to put it into a functioning state so that it could then be maintained in that state.
I am satisfied however that by putting the pump into working order, the lessee has effected an improvement with the implied consent of the landlord. He is entitled to compensation for that improvement.

Bridson v Relf

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