Terabond Pty Ltd v Tsilfidis

Supreme Court of NSW|2024-06-19|Before: Garling J, Dhanji J, Weinstein J, Ierace J

Relevant Facts

On 6 December 2019 the plaintiff, Terabond Pty Limited ("Terabond"), exchanged contracts with the defendant, Mr Paul Tsilfidis, for the purchase by the plaintiff from him of a property on New Canterbury Road at Dulwich Hill. On 12 June 2020 that purchase settled. Thereafter, Terabond has been the registered owner of the Dulwich Hill property.
On 12 June 2020, shortly prior to the settlement occurring, an oral agreement was entered into by which a director of Terabond, Mr Gav, agreed with the defendant that he could remain living in the upstairs part of the building for an unspecified period of time. That occupation was upon the condition that when Mr Gav, on behalf of Terabond, asked the defendant to leave, he was required to leave promptly and without dispute. In that conversation, it was noted that Mr Gav could not give the defendant any guarantee that he could remain in residence for more than three months. It was on that basis that the defendant remained in occupation. I note that that occupation did not require him to pay any moneys by way of rental, nor by way of electricity bills or other outgoings. It was, on all hands, a very generous arrangement for the defendant.
Notices to Vacate were served on the defendant on or about 19 March 2021, 14 April 2021, 30 April 2021 and 28 April 2023. The defendant did not vacate at any time in accordance with those notices. In my view, each and all of those notices clearly constituted requests by Terabond to the defendant to leave the premises and to cease his occupation, precisely as contemplated by the oral agreement entered into on 12 June 2020. The defendant did not leave.

Today's Hearing

The part of the proceedings which now remains comprises a claim by the plaintiff for mesne profits. The proceedings were fixed for final hearing today, on 19 April 2024, by the Common Law Registrar.
I am satisfied that on a number of occasions after 19 April 2024, by correspondence from the plaintiff's solicitor, the defendant has been informed of the hearing today. The plaintiff has been provided with all of the documents which have been filed and upon which the plaintiff proposes to rely. The defendant has not sought to file any evidence in opposition to the claim, although provision was made by case management orders for that to occur.
I note that yesterday at 1.29pm my chambers received an email apparently from the defendant. The email said that he had been unwell and had spent some time in hospital for unspecified conditions from which he was recovering. He drew attention to what he called the "relentless harassment" of the plaintiff's solicitors, because they had sent him emails and other communications. And then, having asked the Court to make an order that communication sent to him "are through the court only", the defendant attached a medical certificate. That medical certificate, dated 18 June 2024, from the Myhealth North Richmond Medical Centre, which was signed by Dr Elvira Arguedas, said: "This is to certify that Mr Paul Tsilfidis has mobility inability due to a medical condition that prevents him from driving and weightbearing until further assessment in the next four weeks."
In response to that email, and at my direction, my Associate informed Mr Tsilfidis that, having regard to the condition certified on the medical certificate which was identified as a restriction on his mobility, he could attend the hearing today by audio-visual link. He was provided with the appropriate link. When the matter commenced this morning there was no appearance from Mr Tsilfidis either by AVL or in person. I see no reason why the matter should not proceed today to a final determination.
The plaintiff claims mesne profits from 19 March 2021 through to 24 October 2023. It submits that, in the circumstances which have been outlined above, the defendant had no right to occupy the property during that period and the plaintiff itself had the right to possession of the property. I should note that the property was a commercial premises, with living quarters above.
The evidence also satisfies me that the plaintiff intended to undertake some development work on the property and then intended to proceed to rent it out to a commercial tenant. The occupation of the property by the defendant from when the first Notice to Vacate was given through to when possession was obtained, has precluded the plaintiff from following the course which it proposed. As well, and relevantly, the defendant has had the benefit of being in possession of the premises contrary to any lawful entitlement and has not had to pay rent or other expenses for an alternative property at which to live.
The claim for mesne profits is for the sum of:

$625 per week for the 12 months ended 18 March 2022;
$700 per week for the 12 months ended 18 March 2023; and
$850 per week for the seven months ended 24 October 2023.

The plaintiff does not contend that it is entitled to GST in respect of those sums.
The sums claimed are supported by the affidavit and annexed expert report of Mr Constantine Dean Galanos, a registered Real Estate Valuer, whose report was prepared in February 2024. I am satisfied that Mr Galanos is an expert, and that his report has been prepared in a way which reflects his obligations to the Court in accordance with the Expert Witness Code of Conduct to be found in Schedule 7 of the Uniform Civil Procedure Rules 2005.
A careful reading of the report identifies the basis upon which the valuation was undertaken, the comparative properties and rental values which Mr Galanos examined and, in respect of each of those properties, I note that his opinion is generally at the lower end of the range of rental being obtained. I am satisfied that his evidence should be accepted, and that his assessment of the likely rental that the property could have obtained is accurate.
The claim for mesne profits by the plaintiff is one which, in effect, claims damages for trespass. A strong line of authority makes it clear that the usual measure of such damages is the value of the market rent for the premises which the defendant should have paid for the period of his occupation. Those damages do not depend on whether a landlord would have been able or willing to let the premises to someone else during the relevant period.
I note that the authorities provide that the assessment of damages is itself restitutionary and that what is being calculated is the value to the defendant and not the loss to an owner. See Lamru Pty Limited v Kation Pty Limited (1998) 44 NSWLR 432 at 439 and 440.

Conclusion

By applying the rates which Mr Galanos has determined for the period between 19 March 2021 (when the first notice to vacate was issued) until 24 October 2023 (when possession was obtained), the total of those rates for the relevant period is $95,494.73. Accordingly, I enter judgment for the plaintiff against the defendant in that sum.
I note that the plaintiff claims, and is entitled to, interest on that sum in accordance with s 100 of the Civil Procedure Act 2005, from 24 October 2023 until today, 19 June 2024, in the sum of $5,187.72. I also order the defendant to pay the plaintiff's costs as agreed or assessed.

Orders

I make the following orders: 1. Order the entry of judgment in favour of the plaintiff against the defendant in the sum of $100,682.45 consisting of: 1. Mesne profits: $95,494.73; and 2. Interest on mesne profits pursuant to s 100 of the Civil Procedure Act 2005: $5,187.72. 1. Order the defendant to pay the plaintiff's costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 June 2024

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