Savers INC (ARBN 075 452 185) v Herosy Nominees and Ors - [2011] VCAT 1160 - VCAT 2011 case summary — Zoe

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Savers INC (ARBN 075 452 185) v Herosy Nominees and Ors

[2011] VCAT 1160

Victorian Civil and Administrative Tribunal|2011-06-20|Before: Mr P

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At a glance

Source facts

Court

Victorian Civil and Administrative Tribunal

Decision date

2011-06-20

Before

Mr P

Source

Original judgment source is linked above.

Judgment (196 paragraphs)

[1]

The applicant-tenant, Savers, claims that its four landlords have failed to maintain the leased premises, and the building in which the premises are located, in good repair. Savers pleads that the registered proprietors of 210 Lonsdale Street, Dandenong are the first, second and third respondents ("210 Landlords") and by amended points of claim filed 7 December 2010, pleads that the registered proprietor of 196 Lonsdale Street Dandenong is the fourth respondent ("196 Landlord"). Savers' claims against all landlords are that the rooves, drainage and sub-floors serving both parts of the premises have fallen into poor repair and have also caused consequential damage within the premises. An example of the consequential damages is that leaking problems led to the collapse of a relatively small part of the ceiling on 2 August 2010.
Savers alleges, and the 210 Landlords deny, breaches of the lease and/or repair covenants under section 52 of the Retail Leases Act 2003 ("RL Act"). Savers seeks orders that the 210 Landlords undertake works including replacing substantial portions of the roof and repairing the remainder, repairing drainage, sub-floor and consequential damage. It estimates the cost of this work is greater than $240,000. Savers also claims $7,050 which it alleges it spent to repair a fascia that suffered wind damage.
Savers' seeks orders that the 196 Landlord undertakes similar work, the value of which it estimates is $165,886.
Although there are two separate land-holdings comprising the leased area, Savers operates it as a single shop. The building in which the leased area is located is sub-divided into five units. The 210 Landlords and the 196 Landlord have one each. There are two others relating to other shops within the building and the fifth unit is owned by the Owners Corporation. The Owners Corporation's title includes the roof and sub-floor, but there was no mention of whether the Owners Corporation also owns the down-pipes that pass through columns in the 210 portion of the premises.

[37]

The evidence of Ms Danials, confirmed by my own observations on site, is that the street frontage is to Lonsdale Street on the west side. The sales area occupies about three quarters of the area of the premises, with a training room in the south west corner and toilets, a store room and staff room to the north east. The production room occupies slightly less than a quarter of the area and is on the east side. Exhibit 1 to Ms Danials' witness statement is a plan of the premises. It is a schematic representation of the layout of the premises, rather than a scaled drawing. The plan shows an exit approximately half way along the west boundary, with an external foyer to the exit protruding approximately 2 meters into the premises.
As agreed by the parties at the site inspection, the area of the premises owned by the 196 Landlord is the four-sided south west corner. It comprises about one quarter of the area of the premises. The northern side of the 196 portion of the premises runs along the north side of the exit foyer and extends west for a total of 13.1 meters. The boundary between the 196 and 210 portions then runs south to meet the southern boundary of the premises.
Although not entirely consistent with Savers pleadings, in the hearing Savers and the 210 Landlords have both described the roof as areas 1 to 4. They are as follows:
- Area 1 - the western awning. This roof is cantilevered over the footpath on the west side of the 210 portion of the premises, with a small area to the west of area 4 at the northern end. It is tray decking running east-west.
- Area 2 - the main pitched roof. This is most of the roof over the 210 portion. It is clad in galvanized corrugated iron. It is to the east of area 1. The whole of this roof includes the roof of the shop immediately to the north of the premises, and is of five shallow pitches, each of about a meter high. The roof of the 210 portion is four of the five pitches, including five valley gutters, which run east-west. The valley gutters are higher than the area 1 roof by, perhaps, a meter. On the west side of the main pitched roof is a metal parapet less than a meter wide and about 500mm higher than the peaks of the pitches.

[83]

This aspect of the dispute between Savers and the 210 Landlords appears to have cost far more money and taken much more time than can be justified by a claim for $7,050.
The dispute might have been exacerbated by a lack of precise expression. There are three elements that have been damaged and the parties have referred to them interchangeably as "the sign" or "the fascia". The elements are a true fascia to the beam running along the western side of the parapet to Area 1, the hoarding on top of the parapet and the signage affixed to or painted on the front of the hoarding, the fascia and smaller signs apparently on the western face of the parapet.
Ms McMaster stated that Savers obtained permission from the City of Greater Dandenong ("the Council") to erect signage on the fascia of the 210 Premises. A copy of the signage permit is at pages 58 to 67 of the exhibit to Ms McMaster's witness statement. The drawing at page 63 shows the sign running the western length of the Area 1 roof and as 3,785 mm high.
A photograph included in the bundle tendered by Savers and marked Exhibit A4 shows that the part of the sign on the hoarding appears consistent with the part of the sign on the drawing shown to be 1,625mm high. It was supported at the back (the east side of the hoarding) by a grid of 3 steel beams running along the base, middle and top of the hoarding and at least14 steel posts. Each post was braced at right angles to the hoarding. Starting at the north end, every second post was braced by with triangular steel, the top of which joined the posts at about three-quarters of their height. The intermittent posts were braced with lighter steel sections attached closer to the tops of the posts and affixed directly onto the parapet.
Savers and the 210 Landlords were both sent notices from the Council dated 28 January 2010 when part of the hoarding and fascia were damaged by wind. Mr Robert Cukierman wrote to Ms McMaster by e-mail dated 2 February 2010 reminding her that there was a 28 day period for "response". He continued:

[85]

In a letter dated 11 February 2010 from Brown Consulting (Vic) Pty Ltd to Mr Bezanson[5] of Savers Inc, the author, Mr Tabban, reported that 5 meters of the sign had collapsed, there was extensive surface corrosion of the remaining steel angle frames and that the remaining frame did not have the structural capacity to withstand lateral forces imposed by wind loading. He recommended urgent removal of "the entire fascia structure" or a temporary strip back of the roof capping to confirm the extent and condition of the existing structure.
Photographs exhibited to Ms McMaster's witness statement at pages 177 to 180 show not only the collapsed hoarding, but also damage to the narrow fascia to the timber structure, exposing the timber beneath the metal and showing an obvious breach in the weather-proofing of the roof cladding.
Savers acted on the Council's breach notice and arranged for Jurcevic Roofing to take down the hoarding and repair the fascia in late April 2010. The amount Savers seeks to recover from the 210 Landlords is an invoice from Jurcevic dated 19 February 2010 for "roof inspection and assessment" of $550 plus the invoice dated 27 April 2010 for "removal and disposal of sign and fascia; including all loose support framework" of $6,500.
According to Ms McMaster's witness statement, a number of emails passed between Mr Whiting and Mr Cukierman - Mr Cukierman said that the 210 Landlords were sending a tradesman to quote on the fascia. Mr Whiting responded that he was too late and expressed the view that the sign could not be reinstated until the roof was replaced. Mr Cukierman told Mr Whiting that the 210 Landlords would not reimburse Savers for work performed without specific consent.
The Owners Corporation produced a number of documents at the hearing pursuant to Savers' Summons to Appear of 31 March 2011. The documents concern a claim by the Owners Corporation on its insurers for "signs damaged in storm" and is for $6,500. The claim was lodged on 20 May 2010. There is no indication of payment or acceptance of the claim. There is an query, apparently from the insurer on 26 May 2010:

[181]

To take the last point first, the "sidewind" is precisely what Savers and the 210 Landlords agreed to when they signed the 1998 lease - clause 2(b) accompanies 2(a) and they are collectively headed "quiet enjoyment". It is clear that the intention of the parties was that they should keep leaks out of the demised premises. There are means that can be adopted to ensure this occurs other than fixing the roof, although fixing the roof, or ensuring that it is fixed, is probably the most practical way of achieving this result.
If the Tribunal cannot order the 210 Landlords to repair the roof and sub-floor without the permission of the Owner's Corporation, it is surprising that the 210 Landlords should have, apparently, repeatedly attempted to repair the roof and drainage in the past. They have also undertaken to do so in the leases and in the agreement of 15 July 2009.
From the letters passing between Mr Robert Cukierman of the 210 Landlords and Mr Wells on behalf of the Owners Corporation, it is clear that there has been a high degree of co-operation between them.
Mr Best said in his opening submissions that the 210 Landlords, or at least the Landlords collectively, "had the numbers" to pass a special resolution. Mr Aghion submitted that this is incorrect, at least with respect to the 210 Landlords. I have not seen or heard evidence about this from any party. I therefore disregard issues concerning control or otherwise of the Owners Corporation.
My attention has not been drawn to it and I have not discovered a reference in the 1998 lease to the 210 Landlords owning a unit within the building, rather than the whole of the building. Nevertheless, I note that clause 2(b) provided in part that the 210 Landlords would: "ensure that the roof and drainage system are maintained." The plain meaning of this phrase was that the 210 Landlords made that assurance regardless of who owned the roof.
As discussed above, although the Owners Corporation is a party to the proceeding, no other party has filed points of claim against it. Without such points of claim, I will not impose a financial burden on the Owners Corporation, other than to provide access to the Landlords to enable them to arrange any necessary repairs.