[46] Peter and Maria Doulakis have not made reasonable efforts to mitigate the loss of rent. I allow loss of rent from 10/05/2005 - 25/09/2005, which period includes the time taken by Pantz Pty Ltd, and a nominal period of one month for re-letting. I calculate the period to be 139 days. It is a term of the new lease that rent is to be paid by monthly instalments of $6,933.23. The daily rate is $227.79. The amount allowed for loss of rent is $31,662.81''.
Plaintiffs' submissions
10 The plaintiffs submit first that the final result is wholly inconsistent with the words "There is no evidence particularising 'the necessary work' of 'the work done'" in par [39] of the judgment. The plaintiffs argue that these words mean that there was no evidence of the work required to be done by Pantz Pty Ltd and that, accordingly, there can be no evidence of the time that it took for the work to be performed. That submission is said to be supported by par [42] of his Honour's judgment, which also suggests "a lack of evidence that the damages claimed [by the defendants] were caused by [the plaintiffs'] breach of the terms of the lease". Furthermore, the plaintiffs contend that the words in par [45] of his Honour's judgment commencing "there is insufficient evidence of the relevant costs of repairs for the damages to be ascertained" render the previous quoted portions of his judgment effectively contradictory and incomprehensible. In other words, if his Honour has made findings of either no evidence, a lack of evidence, or insufficient evidence, relating to the work, such findings must infect the validity of any conclusion to which his Honour came about the carrying out of the repair work by Pantz Pty Ltd or the period that it took to do it. That, so the plaintiffs argue, leads necessarily to a conclusion that no period has been identified in the judgment during which the defendants were both unable to lease the premises and recover rent by reason of the fact that repair work upon them was being carried out. The plaintiffs also submit that his Honour's conclusion that the defendants had "not made reasonable efforts to mitigate the loss of rent" puts an end to any suggestion by the defendants that his Honour's judgment can continue to stand as an internally consistent whole.
Defendants' argument
11 The defendants respond in the following ways. First, the defendants submit that the reference to "the necessary work" in the sentence extracted from par [39] of the judgment was a reference to the evidence of Peter Doulakis in which he used that expression to include all of the work that was required to be performed at the premises and not merely the work to be performed by Pantz Pty Ltd. The defendants contend that the words "there is a lack of evidence that the damages claimed were caused", extracted from par [42] of the judgment, should be read as intending to convey "there is a lack of evidence that all of the damages claimed were caused", by the plaintiffs' breach of the terms of the lease. The sentence refers to "damages", not "damage". The defendants submit that their suggested interpretation follows from the fact that there was evidence that at least some of the damages claimed were caused by the plaintiffs, a fact necessarily following from his Honour's refusal to return the plaintiffs' security bond which he effectively set off against the amount in the Pantz Pty Ltd invoice. The defendants say that it is also to be noted in this regard that their claim for damages was $60,000, and that the learned Magistrate's judgment unambiguously demonstrates that they had been unable to satisfy his Honour that there was evidence to support a claim of that order.
12 Secondly, the defendants submit that the first sentence of par [43] of the judgment, that the defendants "did not take reasonable steps to mitigate the loss" is wholly consistent with his Honour's finding that there was a lack of evidence that the damages that they claimed were caused by the plaintiffs' breach of the terms of the lease. The learned Magistrate awarded damages corresponding to the defendants' loss of rent for the period during which the Pantz Pty Ltd work was being carried out upon the assumption that the premises could not have been leased during that time. Furthermore, his Honour's finding that the defendants did not take reasonable steps to mitigate losses occasioned to them for the whole of the period after the plaintiffs left the premises is itself consistent with his Honour's remark in par [43] that it was "not possible to determine accurately the extent of loss of rent had [the defendants] not deferred repairs". In other words, so the defendants argue, his Honour was concluding that it was only possible to say that the defendants were entitled to damages for loss of rent during the period when the Pantz Pty Ltd works were being performed and that by implication they were, at least for that period, appropriately mitigating their loss by bringing the premises back to a state of tenantable repair.
Consideration
13 Paragraph [46] of his Honour's judgment is critical to his determination. Indeed, it is not without significance to observe that the plaintiffs' further amended summons seeks an order varying the terms of the judgment by deleting that paragraph completely! In my opinion, however, par [46] has a clear meaning when read in the overall context of the judgment. When his Honour said that the defendants had "not made reasonable efforts to mitigate the loss of rent", that, in my opinion, must be read as a statement that they had not made reasonable efforts to mitigate the loss of rent that they claimed. That much is apparent from the fact that his Honour rejected by far the greater proportion of the defendants' claim for loss of rent. It is inherent in the terms of par [46] of the judgment that his Honour formed the view, in allowing loss of rent from only 10 May 2005 until 25 September 2005, that the defendants, by performing work during that period until at least 25 August 2005, were necessarily mitigating their loss. His Honour's allowance of a period nominally selected as one month for re-letting appears to explain his choice of the date of 25 September 2005 as one month beyond the date when the Pantz Pty Ltd work ceased on 25 August 2005. His Honour's words in par [45] to which the plaintiffs take exception, as discussed above, are in my opinion unexceptionable if read, as I consider they ought to be read, as "there is insufficient evidence of the relevant costs of repairs for all of the damages claimed to be ascertained". His Honour was clearly satisfied, and in my opinion entitled to be satisfied, that there was evidence of the relevant costs of the Pantz Pty Ltd work at least.
14 I do not consider that the plaintiffs have demonstrated that the judgment contains an error of law. The classic delineation between questions of law and questions of fact was articulated by Sir Frederick Jordan in Australian Gaslight Co v Valuer-General (1940) 40 SR (NSW) 126 at 138, where his Honour said:
"A finding of fact by a tribunal of fact cannot be disturbed if the facts inferred by the tribunal upon which the finding is based are capable of supporting its finding, and there is evidence capable of supporting its inferences … such a finding can be disturbed only (a) if there is no evidence to support its inferences or (b) if the facts inferred by it and supported by evidence are incapable of justifying the finding of fact based upon those inferences."
15 In Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139, Kirby P (dissenting) at 151 discussed what type of error constitutes an error of law as follows:
"The finding of what have been called primary facts of a case does not, in itself; expose the trial judge to review on a point of law, unless it can be shown that there is no evidence of a primary fact and that, this being crucial to his decision, the judge's fact finding has involved an error of law. If there is evidence, or if there are available inferences which compete for the judge's acceptance, no error of law occurs simply because the judge prefers one version of the evidence to another or one set of inferences to another. This is his function … Where the evidence points only in one direction, and, as in Poricanin the trial judge nonetheless states that he disbelieves it, the onus being that person, the court, on appeal may not intervene."
16 I was referred to the decision of Hall J in US Manufacturing Co Pty Ltd v ABB Service Pty Ltd [2008] NSWSC 705. After a careful review of the relevant authorities his Honour concluded, at par [105], that recent decisions of the Court of Appeal establish that a failure to provide adequate reasons is capable of constituting an error of law. His Honour continued at par [106] that "[i]t does not automatically follow that because the reasons for a decision are inadequate, an appellable error has necessarily occurred".
17 In the present case I am not satisfied that the learned Magistrate did fail to provide adequate reasons. However, even if I were wrong in that conclusion, I would also find that no appellable error occurred in any event. His Honour's judgment, understood in the way that I have discussed, indicates that he formed the view that the defendants were entitled to no part of their claim for damages for lost rent beyond a closed period during which work was actually being carried out on the premises to rectify damage which he found, but which the plaintiffs now in any event admit, had been caused by them. The fact that Bedford Catering Pty Ltd was in occupation of the premises also carrying out extensive work of their own is beside the point, because the Pantz Pty Ltd work took place during the rent-free period that applied under their lease. The premises could not have been leased for rent to any party during that period because of the damage that the plaintiffs had caused.
18 In these circumstances I consider that, subject to what follows, the present proceedings should be dismissed. The matter that concerns me is his Honour's order in favour of the defendants for damages for the period described as "a nominal period of one month for re-letting". In the events that occurred, the premises had been re-let and the rent-free period expired 15 days following completion of the Pantz Pty Ltd work on 25 August 2005. In those circumstances the defendants were in fact receiving, or entitled to receive, rent from Bedford Catering Pty Ltd for at least one half of the so called nominal period in respect of which his Honour ordered the plaintiffs to pay damages. To that extent there is a clear double counting which in my opinion ought not be permitted to stand. His Honour's finding that the defendants were entitled to damages for lost rent for any period after Bedford Catering Pty Ltd became obliged to pay rent to the defendants as well is itself an error of law.
19 In those circumstances I invite the parties to bring in short minutes of order reflecting my decision that the proceedings should be dismissed but including an order varying the terms of his Honour's judgment in accordance with s 75(a) of the Local Courts Act 1982 reducing the sum of $31,662.81 by the amount of damages, calculated at the rate of rent payable by Bedford Catering Pty Ltd, that are referable to the period between 9 September 2005, when Bedford began to pay rent, and 25 September 2005, the end of the "nominal period" of one month to which his Honour referred. I shall also hear the parties on the question of costs.