2. Upon the respondent's counterclaim the applicant must pay to the respondent the sum of $6,250.

For the Applicant: Mr Franz Holzer of Counsel, instructed by Ferraro and Co Pty

For the Respondent: Mr McIntyre of Counsel, instructed by Clark and Toop

1. On the 30th of July 1999 the applicant landlord and the respondent tenant in this proceeding executed a lease of premises to be used as a take-away food outlet and restaurant. The lease was for a term of one year and provided some four options for renewal. The rental was stipulated as being the sum of $966 per month. The premises were at Shop 22 City Place, Sunshine. The tenant Mr Santana went into possession. He had bought the business at the take-away outlet from a previous operator.

2. In the initial months Mr Santana found the going somewhat hard. He was not able to keep up the rent for the period before Christmas of 1999. By the end of 1999 he was substantially in arrears of rent. The landlord says that Mr Santana made an arrangement for the landlord to be paid arrears of rent on the 24th of December. In fact Mr Santana had already closed the business for the Christmas holidays. He says that he had consulted a number of suppliers to the business and had concluded that since the main clientele for the business were school children from a nearby school, it would be unprofitable to trade during the school holidays. There was some dispute between the landlord Mr Jovanovski and the tenant Mr Santana as to precisely what the tenant Mr Santana may or may not have said as to his plan for closing the business over the school summer holidays. I believe it is likely that at least something was said and the something was according to what Mr Santana remarked, that he intended to re-open the shop at some time in the second half of January.

3. Mr Santana says that in the second half of January he visited the shop, did not re-open it but merely gained access through the back door. He surveyed the scene and concluded that there was nothing doing and that there would be no trade and deferred any thought of re-opening until, according to his evidence, the 30th of January of that year which was a Monday.

4. Meanwhile, a few days prior, the landlord and his son had made enquiries and found business not trading. They say that they made telephone enquiries to a number that they had been given and also visited premises in Yarraville which had certainly been the tenant's residence. Mr Santana says that he had informed the landlord Mr Jovanovski that he was moving to Taylors Lakes. He had, it seems, given the landlord the telephone number which was the number of the previous occupier of the house that he bought at Taylors Lakes. Because of a change in telephone carrier the number at those premises was changed. The effect then according to the landlord was that the tenant was not in occupation of trading and could not be contacted.

5. In those circumstances, the landlord says, that he took action upon legal advice to change the locks in the premises and re-enter. It is common ground that all of the plant and equipment which had been purchased as part of the sale of business arrangement remained in situ and that refrigerators and cool rooms remained in situ and with food left in them. There then followed a period of disputation with the tenant objecting and remonstrating as to the lock-out and the landlord declining to grant access to the tenant to remove plant and equipment and stock. It is unnecessary for me to trace the details of those disputes or note the differences in accounts which the two sides give.

6. It is common ground that round about the end of January 2000 the lease was terminated. The landlord says that this was as a result of repudiation on the part of the tenant either in abandoning the premises or in being grossly in arrears of rent. The tenant says that the repudiation was committed by the landlord by reason of an unlawful lock-out. Eventually the tenant was given access to remove items of property and both plant and equipment and stock were removed. That access was eventually had in May 2000. In April the sum of $3,106 representing outgoings and arrears of rent was paid. Some $2,490 of that sum of money paid on the 6th of April represented the payment of rent.

7. I now turn to the claims which are made by the two parties. The applicant landlord makes a total claim of $9,000 constituted by the sum of $7,300 for rent and the sum of $1,700 representing the cost of making good the premises after the removal of plant and equipment which was disassembled by the tenant in May.

8. So far as the tenant is concerned, he makes a counterclaim seeking $4,750 representing the total amount paid in rent and the tenant says that this amount is recoverable by reason of the fact that, as is common ground, these premises were retail premises within the meaning of the Retail Tenancies Reform Act 1998 and no disclosure statement was given in accordance with Section 8 of that statute. Some $1,500 representing the cost of food spoiled by reason because the tenant being locked out and unable to obtain access until May and $2,750 representing damages for loss of profits for repudiation for the term of the lease after the tenant was excluded from occupation. Finally, the tenant seeks repayment of the $1,000 security deposit or bond which was paid in accordance with the terms of the lease.

9. I turn therefore to the claim made by the landlord. The sum of $7,300 represents rent through to the conclusion of the 12 month term provided for in the lease. As Mr Holzer who appears on behalf of the landlord was disposed to concede, this cannot be correct. The lease was terminated by repudiation. The parties are agreed on that in January. Whilst, depending upon the interpretation of events, the one side or the other side may be able to recover damages for repudiation, if a finding is made that the one side or the other side repudiated the lease, the amount of the rent cannot be simply recovered as a liquidated sum. There was no evidence from the landlord which would enable me to make any award for damages for repudiation. Assuming for the purposes of the argument that the landlord had proven the tenant had repudiated the lease, in those circumstances I must immediately put to one side any claim for rent accruing after the date that the lease was as agreed by both parties, terminated.

10. The claim for rent arrears prior to that period immediately takes me to a primary element of the counterclaim relied upon by the tenant, namely Section 8 of the Retail Tenancies Reform Act 1998. Sub-section (2) provides:

"(2) If a tenant has not been given a disclosure statement in accordance with sub-section (1) before entering into a retail premises lease--

(a) the tenant may withhold payment of rent until the end of 7 days after the landlord gives the tenant a copy of the disclosure statement; and

(b) the tenant is not liable to pay the rent attributable to the period before the landlord gave the tenant a copy of the disclosure statement;

11. The tenant places reliance upon paragraph (b) and it is again common ground that no disclosure statement has been given.

12. Mr Holzer on behalf of the landlord submits that his client has acted reasonably and in good faith throughout. He notes that the landlord did not have the advantage of legal advice. Whilst it remains unclear precisely what role the tenant's solicitor did or did not play in the grant of the lease, it is clear apparently that the lease was drawn by the landlord's agent using a Law Institute stationery item. Further, it emerged in cross-examination that the tenant was well aware of the obligations that he had under the lease and did not claim to have been misled or in any general sense prejudiced by the lack of a disclosure statement.

13. A letter from the tenant's solicitors of February 2000 makes oblique reference to the Retail Tenancies Act and the lack of conformity with its formal requirements. It is only later in April that a distinct claim such as the one now mounted for the re-payment of all the rent that has been paid was made by the tenant's solicitors. In those circumstances Mr Holzer submits that it was proper to regard the tenant as having irrevocably waived any requirement for a disclosure statement. Further, Mr Holzer says the evidence shows that the tenant has in no way been prejudiced by a lack of any disclosure statement.

14. What then is the correct interpretation of Section 8(2)(b)?

15. Perhaps before going to that interesting issue it is appropriate to note the basis upon which the tenant says that not only does that provision allow him to resist any claim for rent not yet paid, but also to recover the rent which he has already paid. Through his Counsel Mr McIntyre he submits that he made such payments of rent as he did under a mistake of law, namely that the lease imposed an obligation on him to make that payment.

16. Mr McIntyre referred to the decision of the High Court of Australia in David Securities v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353 where their Honours overruled an earlier authority held that moneys paid under a mistake of law are as much recoverable in accordance with law of quasi-contract, or restitution, to use the more contemporary terminology, as are payments made under a mistake of fact. Here in Mr McIntyre's submission his client was acting under a mistake of law, namely that the lease imposed a legal obligation upon him to pay rent. He was ignorant of the provisions of Section 8 which in Mr McIntyre's submission by their plain terms, negated any such liability.

17. I turn then to the issue of the operation of Section 8(2)(b). First, I note that there is no proviso to be found in Section 8(2) relieving a landlord from the consequences of loss of rent if the landlord acted reasonably. In that regard it is to be contrasted with Section 8(5) which in certain circumstances entail a breach of the Act's disclosure requirement and which entitle a tenant to give the landlord a notice cancelling the lease. Sub-section (8) operates by way of a proviso to the tenant's entitlement to cancel the lease based upon a finding "that the landlord has acted honestly and reasonably and ought very to be excused from the contravention and that the tenant is substantially in as good a position as the tenant would have been if there had been no contravention". That provision for landlord relief applies only where the tenant purports to exercise a power under sub-section (5). It has no operation, according to its text, with respect to sub-section (2). What that indicates to my mind is that when Parliament desires to provide relief for parties such as landlords from the consequences of contraventions, forfeitures and the like, it knows the language to use. The presence of such a relief provision in one part of the section and its absence in another is a clear indication to my mind, that Parliament intended that there be no such avenue of relief for a landlord, be he ever so reasonable and bona fide; be the tenant ever so lacking in merit or demonstrated prejudice as a result of the failure to provide the disclosure statement.

18. In that regard there are other examples of Parliament knowing the language and the means to provide relief from the consequences of creating a forfeiture for one partner and an apparent windfall for another independent of demonstrated damage or prejudice. I refer for instance to Section 22(2) of the now repealed Money Lenders' Act 1958. That sub-section acted as a proviso to sub-section (1) which rendered irrecoverable regulated loans of money made by money lenders who did not hold licences under the Act. A money lender was authorised by sub-section (2) to be able to recover the principal but not the interest of a loan "if he satisfies the Court that the failure to hold a licence was accidental and due to inadvertence and that he had acted honestly and reasonably in all the circumstances of the case and ought fairly to be excused for the failure."

19. Section 23 of the same Act provided that a money lender could not recover interest on a regulated loan if the requirements for a note or memorandum of loan as stipulated by that Section were not met. Sub-section (4) however provided that the note or memorandum would not be regarded as insufficient with the consequence that interest not be recovered "if the Court or Justice before which or whom the enforceability of any such contract or security comes into question was satisfied that such omission incorrect or insufficient description or this description is accidental due to inadvertency is not of such a nature as to be liable to mislead or deceive any person who is prejudiced or disadvantaged."

20. Finally, Section 67 of the Trustee Act 1958 allows the Supreme Court to relieve a trustee from the consequences of personal liability if the trustee "has acted honestly and reasonably not fairly to be excused for the breach of trust". The presence in other statutes and elsewhere in Section 8 of such provisions and their absence with respect to Section 8(2) shows that Parliament has on this occasion set its face against considerations as to whether the landlord in contravention has acted reasonably or whether the tenant has been prejudiced. The effect therefore is to punish the contravening landlord, perhaps in a manner that passes beyond any moral culpability and potentially to create a windfall for the tenant. Be that as it may, that seems to be the clear affect of the Section. Moreover, David Securities has the operation which Mr McIntyre suggests that it has, entitling a tenant paying rent in ignorance of Section 8 to recover that rent as moneys had and received where no disclosure statement has been given.

21. It follows therefore that independent of the Shevill's case [Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620] issue to which I made reference already, Section 8 of the Retail Tenancies Reform Act means that the entirety of the landlord's claim for rent must fail.

22. The balance of the landlord's claim relates to alleged failure to make good the premises upon the termination of the lease. The parties are agreed that if the tenant is liable for his failure to make good, the cost of restoration of the damages that should be awarded are in the sum of $1,700.

23. If one turns to the lease, Clause 3.1 and the following clauses impose a relatively orthodox obligation to repair upon the tenant, Clause 5.1 provides:

5.1.1 return possession of the premises to the landlord in clean and repaired condition as required by this lease, and

5.1.2 remove the tenant's installations and other property from the premises and make good any damage caused in removing it."

24. In so far as the air-conditioning items and ventilation, plant and equipment was removed by the tenant, this left holes in the ceiling and holes in the roof. The holes in the roof have been capped but the holes in the ceiling have not been.

25. In my view the tenant had a clear obligation to make good the damage. The express provisions in the lease which I have read would appear to impose such an obligation upon him. In any event, the items in question, by their nature would seem to be likely to be fixtures and the right to remove fixtures, whether it be at common law or pursuant to Section 28 of the Landlord and Tenant Act 1958 carries with it an obligation to make good.

26. The tenant says that he was seeking to make good these holes but was told by the landlord that he had already taken too much time. The landlord says that far from rushing the tenant out, he complained about the failure to make good. Precisely who was telling the truth on this point is difficult to be confident of. What I can say is that in the circumstances the landlord's account seems the more likely. There would seem to be no obvious reason why he would have prevented the tenant from carrying out further works which would not be seen to the landlord's advantage. In those circumstances the claim for $1,700 damages for failure to make the premises good upon the removal of tenant's installations is made out.

27. I now turn to the counterclaim. The first item is the return of rental paid. The parties are agreed that the total rent paid was in the sum of $4,750. Approximately half of that was paid before the lock-out, abandonment or however one cares to describe the events of late January 2000. Some $2,490 was paid on the 6th of April. In my view as to the rent that was paid before the termination of the lease, Section 8(2)(b) and the principle of David Securities give a clear basis for the tenant to recover those sums of money. Section 8(2)(b) negated the obligation to make those payments and Mr Santana said that when he made those payments he was unaware of the significance of the landlord's failure to give a disclosure statement.

28. More difficult issues arise as to the later payment of $2,490. It will be recalled that this payment was made on the 6th of April. The issue of formal compliance with the retail tenancies legislation had been obliquely raised in the letter from the tenant's solicitors to the landlord or his solicitors in February. Section 8 was only distinctly raised in February and after that payment was made. Mr McIntyre informed me from the bar table in his closing address that according to his instructions the significance of Section 8 had only become evident when his client had obtained advice from another member of Counsel after the payment of the 6th of April were made. On the other hand this fact, if it be a fact, did not emerge in any evidence adduced in the course of the tenant's case. It may be that since Section 8 is only distinctly and directly raised after the payment of the 6th of April, that one could infer that Mr Santana and indeed his legal advisers were labouring under the same misapprehension and mistake of law which afflicted them when they made the earlier payments. I think on balance that is the more likely interpretation of events. Even if I were wrong in that, the evidence establishes that Mr Santana made this claim solely with a view to gaining access to the property which was locked in the premises from which he had been excused since the end of January.

29. Windeyer J. said in Mason v New South Wales [1959] HCA 5; (1959) 102 CLR 108, 144 that payment made under pressing necessity to avoid a seizure of goods or to obtain the release of goods unlawfully detained or to prevent some interference with or withholding a legal right is compelled and not voluntary. It is recoverable in an action for money had and received. His Honour's dictum is quoted at paragraph 526 page 168 of the work "Restitution Law in Australia" by Keith Mason, now President of the New South Wales Court of Appeal and Professor J.W. Carter. Accordingly, even if the evidence did not establish that the tenant was still labouring under a mistake of law it shows that when he made that payment he was acting under duress in a sense explained by Windeyer J. Accordingly, in my view therefore, the entire $4,7;50 is recoverable by the tenant.

30. Implicit in what I said as to the alternative basis for recovery of the sum of $2,490 is that the detention of the tenant's personal property by the landlord was unlawful. So much I think flows from the abolition of distress as a landlord's remedy in Victoria by Section 12 of the Landlord and Tenant Act 1958. It would follow from that, likewise, that in so far as perishable goods in the nature of food were effectively destroyed or rendered worthless during the time of that detention, the tenant should have damages for that loss. Accordingly I would allow the tenant's claim for $1,500 for the spoiled food.

31. The tenant also claimed as I previously noted, the sum of $2,750 damages for repudiation of the lease by the landlord. This represented it was said, loss of profits for the balance of the one year term. I do not pause to make a finding as to whether in the circumstances the landlord is to be regarded as having repudiated the lease. Though of course once one proves that the landlord had no entitlements to rent, the basis for the lock-out, at least a legally justifiable basis, is difficult to find. Be that as it may, it seems to me that the damages claimed for repudiation fails for more than a simple lack of evidence. Whilst the parties did agree that $2,750 was the figure which should be awarded if I were persuaded that this tenant has been deprived of some months of profitable trading, I am not so persuaded. The tenant's evidence was that he found it tough going, that he was embarrassed and humiliated at not being able to pay the monthly rent to the landlord. Things were so grim that he decided to close over the school holidays. On some days his takings were as low as $90. It has not been demonstrated to my mind that on any consistent basis that this tenant would have traded profitably at all. Accordingly I dismiss the claim for damages for loss of profit.

32. The final claim is for recovery of the $1,000 bond. The finding that I have already made as to the failure to make good the premises would obviously negate the tenant's ability to recover the bond or security deposit. I do not recall that the evidence distinctly indicated whether that $1,000 bond has in any way been brought to account already for the purposes of calculating the agreed sum to make good the premises. If it has not been already brought to account then presumably it should be offset against the $1,700 which I have found that the landlord ought to be able to recover from a failure to make good. At any event it is not recoverable so far as I can see by the tenant.