The application for review is opposed by the applicants. They did not appear at the review hearing but were represented by Mr Kontoudis, solicitor. The respondents were represented by Mr Little of Counsel.
[2]
The first respondent said he did not receive any of the mail which had been sent to him by the tribunal and that he stumbled across the letter from the applicants' solicitors dated 8 January 2010 when he was looking for his passport. He said he thought this was around the 20th, 21st or 22nd January 2010. It was in an empty television cabinet with some other papers. As soon as he found it he took it to his father who advised him to ring the family solicitors. At the same time he said he found something from the police about him driving whilst his licence was suspended and that he had since been to the police station to sort that out.
The first respondent gave evidence that he lives at home with his parents. He said he is one of ten people living in the house, few of whom speak English. His grandmother also lives there and she often collects the mail. However, she does not speak English. Although the mail is normally put in the kitchen he said his grandmother often puts it in odd places including the pantry and sometimes she simply puts it in the garbage. Mail is not usually put in the old television cabinet.
He said that he never checks if there is any mail for him because he has no reason to expect any. He does not have any bills because he lives at home with his parents. In answer to a question from me, he said that after he was locked out of the shop he did not have the mail forwarded and any cheques that might have come to him in payment of outstanding accounts he simply missed out on. Further, he is not the only "Mr B Zekiri' living in the house as his brother 'Bekim' also lives there.
During 2009 he was overseas for a period of approximately 6 months returning to Australia on 8 November, the day before the notice of hearing was sent. I understand he had been overseas making arrangements to bring his new bride back to Australia - they were married in Australia on 22 November 2009.
The first respondent said that he always thought the lease was for a two year period but now sees it was for three years. It commenced on 1 April 2006. He said the shop was in a fairly poor condition and that his father (the second respondent) met with the landlord in September 2008 to discuss painting and renovating it on the understanding he would be granted a new lease. However, he said he understood that after the work was done the landlord told his father he was not prepared to enter into a new lease and was only prepared to agree to a monthly tenancy.
He said the next door tenant who operates a noodle and sushi shop offered him money to "get out".
After the landlord indicated he was not prepared to enter into a further lease, his father stopped giving him the money to pay his rent and a month later the landlord locked him out.
He said the landlord allowed him access on one occasion only to remove some of his goods and then only after payment of $1,000. He said he grabbed the bench and a few other things and left but could not take everything with him. He said he left behind vases, teddy bears, shelving, boxes, sponges and balloons and some other stock.
He said he did not know there was an ongoing problem and thought after he had paid the $1,000 that 'they [the landlords] would let it go'.
He said he had no knowledge of the request for mediation from the Small Business Commissioner. A copy of an email dated 5 August 2009 from the office of the Small Business Commissioner referring to correspondence of 16 June 2009 to him and his father seeking their attendance at mediation, was put to him. The first respondent said he had not seen this and that it had been sent to the wrong email address.
[3]
The second respondent, Dizo Zekiri, is a flower grower and operates three florist shops. He said that although he speaks and understands English, he cannot read it and all business mail is sent to his shops. He said that in or around September 2006 he had some discussions with the landlord about painting and renovating the shop on the understanding his son would be granted a lease for the further term. He said he spent approximately $8,000 painting the shop and replacing shelving and benches. When the landlord told him that the applicants were not prepared to grant his son a lease for a further three years, in accordance with what he says was the agreement reached in September before the work was done to the shop, he stopped helping his son with the rental payments and his son fell behind in the rent.
He said he did not have any knowledge of these proceedings until his son showed him the letter from the applicants' solicitors dated 8 January 2010 when, he said, he told him to immediately contact the solicitor.
[4]
(1) A person in respect of whom an order is made may apply to the Tribunal for a review of the order if the person did not appear and was not represented at the hearing at which the order was made.
[5]
(2) An application under subsection (1) is to be made in accordance with, and within the time limits specified by, the rules.
[6]
(3) The rules may limit the number of times a person may apply under this section in respect of the same matter without obtaining the leave of the Tribunal.
[7]
(a) hear and determine the application if it is satisfied that the applicant had a reasonable excuse for not attending or being represented at the hearing; and
[8]
(b) if it thinks fit, order that the order be revoked or varied.
[9]
(5) Nothing in Division 3 of Part 3 applies to a review under this section.
[10]
Did the respondents have a reasonable excuse for not attending the hearing?
[11]
Although I understand the concerns expressed by the solicitor for the applicants that the first respondent's attitude to his mail appears to be irresponsible, irresponsibility does not of itself mean that he did not have a reasonable excuse for not attending the hearing. Here I am not concerned with whether his lack of responsibility about his personal affairs was reasonable, but whether he had a reasonable excuse for not attending the hearing. I accept that he did not know about it. He said that as soon as he found the letter he asked his father for advice, who told him to immediately contact the solicitor which he did. He made an appointment for the next day or so. The solicitor immediately wrote to the tribunal seeking advice as to the appropriate form to be used and then prepared the statutory declaration in accordance with the first respondent's instructions and immediately forwarded it to the tribunal. The facsimile stamp records it was received at 10.19 on 4 February 2010 which I accept was within the 14 day period from when the first respondent first became aware of the tribunal's order around 21 January 2010. If it was one day late, then I extend time under s126 of the VCAT Act to 4 February.
Mr Kontoudis referred me to Curcio v HGF & SPV Homes Pty Ltd[2003] VCAT 1041 where the tribunal did not accept that SPV, the applicant for review, had not received the notices of hearing and found that 'If SPV and its officers did not acquaint themselves with the contents of those documents, it was not because they did not arrive'.[1] However, that finding must be considered in the context of the facts and circumstances surrounding that case, and in particular the delivery confirmation receipt signed by J Kiriakidis confirming a summons for directions had been delivered to the company, and Mr Kiriakidis' evidence that 'there were no particular difficulties with the post at the address to which the notices were sent...'[2]. Here, there is no dispute that the notices and other correspondence were sent to the correct address but I accept they did not come to the attention of the respondents because of what seems to be a disorganised approach to mail in a household of ten people where only a few read English.
It is established that the tribunal should adopt a liberal approach when considering an application under s120. In Avonwood Homes v Miladonanovic[2005] VCAT 1297 after noting the comments of Bongiorno J in Alesci v Salisbury[2002] VSC 475 where he said:
[12]
Section 120 is a section which is to be construed liberally. It would be difficult, I think, to put forward a case where a blameless non-attending defendant would not be entitled to review of an order made in his or her absence.
[13]
I accept that, in determining what is a reasonable excuse, the Tribunal should adopt a liberal approach; where for example the failure to attend is due to oversight or accident or reliance upon one's solicitors. But these situations are different to a situation where the failure to attend arises from the Respondents hiding themselves from the Applicant and the Tribunal.[3]
[14]
Here I am not concerned with a subjective test as to whether the respondents' conduct of their daily affairs is that of prudent persons, but whether they had a reasonable excuse for not attending the hearing. Although the applicants have done everything that could reasonably have been expected of them in having mail sent to the respondents at their current address, this is not sufficient to find they had notice of the hearing. The finding of the tribunal at the hearing on 15 December 2009, that all reasonable steps had been taken by the applicants to make the respondents aware of the situation, is not conclusive nor binding because the tribunal on that occasion had not had the benefit of hearing from the respondents. I find through no direct fault of their own the respondents had a reasonable excuse for not attending the hearing on 15 December 2009.
Having said that, hopefully the respondents now understand the importance of taking responsibility for their mail and in particular making sure there is a process in place so that mail delivered to their home reaches the person to whom it is addressed.
[15]
Having satisfied myself the respondents had a reasonable excuse for not attending the hearing, the orders of 15 December 2009 should only be set aside if I consider it fit to do so. As SM Walker said in Avonwood[4]
[16]
...I think the hearing proceeds in two stages. In the first instance the Tribunal must satisfy itself that there is a reasonable excuse, giving those words 'reasonable excuse' a very liberal interpretation. Once satisfied that there is such an excuse the Tribunal should then proceed to consider the other matters including whether there is an issue to be tried...
[17]
Mr Kontoudis submitted that even if I were satisfied the respondents had a reasonable excuse for not attending the hearing, there could be no defence to the applicants' claim which is simply for rent arrears, costs and damages. However, I note that the amount allowed for rental arrears and outgoings was $663.28 - a very small proportion of the overall award of $15,343.35 which included an amount of $6,650 for legal costs.
Mr Little submitted on behalf of the first respondent that he has a very real defence to the applicants' claims and proposes to file a counterclaim. The defence will include claims that the applicants acted unconscionably in undertaking to grant a further lease and thereby inducing the respondents to carry out the renovation works; that the applicants have been enriched as a result of those works being carried out. Further, there is a real question as to the steps taken by the applicants to mitigate any loss noting the tribunal allowed loss of rent for the period 2/12/2008 to 31/3/09.
Although it was suggested by Mr Kontoudis that the issue of the merits of the respodents' defence should have been the subject of an affidavit, and it will be recalled that I expressed some concern at the commencement of the hearing that affidavit material in support of the application had not been filed and served, on the material before me I accept there are issues about which the respondents should be given an opportunity to be heard. The hearing of an application under s120 is not a hearing on the merits, and even had I heard from representatives of the applicants, it would have been inappropriate to determine the merits without a substantive hearing. Here I am satisfied the sworn evidence of the respondents, when considered in the context of the applicants' claims, demonstrates they have an arguable defence which they should be given an opportunity to have heard and determined.
In Knight v Mackay & Ors[2008] VSC 602 whilst dismissing an appeal from the tribunal's decision to refuse an application under s120, Williams J quashed the tribunal's orders because she was not satisfied the tribunal had considered whether Mr Knight had been given notice of the hearing. Having observed that a substantial award of damages had been made against Mr Knight together with an order for indemnity costs, her Honour said:[5]
[18]
...I respectfully agree with what was said as to the importance of service in Wright v VCAT & Anor[2001] VSC 35:
[19]
One can not over-emphasise the importance of complying with the rules of natural justice and acting fairly. Except in the case of an interim injunction, the Tribunal must not proceed without notice against another party making findings and making orders and without giving that party an opportunity to be heard.
The Tribunal must, as a first step, where a party fails to attend, be satisfied that proper service has been effected on that person and that person does not propose to appear.
Accordingly, I will allow the application, set aside the orders of 15 December 2009 and reserve costs with liberty to apply. I will also order the proceeding be referred to a further directions hearing before me but this may be vacated if the parties file signed Minutes of Proposed Consent Orders setting out an interlocutory timetable and an estimate of the hearing time required. I will give the parties leave to apply by consent for the proceeding to be referred to mediation as it appears the parties have not had an opportunity for settlement discussions.
Parties
Applicant/Plaintiff:
Panwell Pty Ltd & Anor
Respondent/Defendant:
Zekiri
Cases Cited (1)
Panwell Pty Ltd & Anor v Zekiri (Retail Tenancies) [2010] VCAT 417 (9 April 2010)