Trustees of the Pious Society of St Charles v Vodap Pty Ltd & Ors

1 This is an application brought by the Trustees of the Pious Society of St. Charles ("the Applicant"). The Applicant is incorporated pursuant to the Roman Catholic Church Communities' Lands Act 1942 and is the registered proprietor of land known as 44 Beaumont Street, Hamilton. By lease dated 13 November 1998 ("the Lease") the Applicant leased to Vodap Pty Ltd ("Vodap") part of the first floor of a building on the land together with part of a verandah ("the Premises"). The Premises were used as a restaurant known as The Italian Centre Restaurant. That business ceased trading on or about 28 December 2002. 2 Mr. Vincenzo Macchia ("Vincenzo"), Mrs. Ornella Macchia ("Mrs. Macchia"), Mr. Domenico Macchia ("Domenico") and Mr. Adriano Macchia ("Adriano") guaranteed to the Applicant Vodap's performance of all of its obligations under the Lease. 3 Prior to Vodap's involvement with the Premises, former tenants who operated the restaurant occupied the Premises. A document titled "Deed of Variation & Assignment of Lease" dated 15 September 1997 ("the Deed") is in evidence. The copy of the Deed is signed by the former lessees and by Vodap but is not signed by the Applicant. The Deed provided for the assignment of the existing lease to Vodap. That lease was said to extend until 31 December 1997. The Deed also provided that "the Lessor further agrees to grant a new lease, the terms of which have been agreed to as at the date of this Deed, such lease to commence on 1 January 1998." The Deed further provided that the Applicant and Vodap "will enter into a new Lease in respect of the premises commencing on 1 January 1998 in accordance with the terms and conditions set out in the Disclosure Statement annexed hereto." the annexed Disclosure Statement provided for "rent review CPI annually". 4 The Lease is for a term of 5 Years commencing 1 January 1998 and terminating on 31 December 2002 with provision for additional options up until 31 December 2012. Item 12 of the Lease provides for rent in the following terms: " For the lease period: From the commencement date to the first rent review date: $37,800.00 a year by weekly payments in advance of $726.93 Afterwards: At the new yearly rent beginning on each review date by weekly instalments of one fifty second of the new yearly rent. For the further period in item 11A: [ie Further period of 5 years from 1.1.2003 to 31.12.2007] From the commencement date to the first rent review date: (for example: Current Market rent Current Market Rent Afterwards: At the new yearly rent beginning on each review date by weekly instalments of one fifty second of the new yearly rent. 5 Item 15 of the Lease provides for rent review in the following terms: "Rent review date Method of rent review 31.12.2003 Method 2 31.12.2008 Method 2 Method 2 is Consumer Price Index Method 2 applies unless another method is stated." 6 The Applicant asserts that the Lease had an error at Item 15 in that it provided for CPI rent reviews only after the first year of the second and third terms. The Applicant argues that the annual rental referred to in Item 12 of the Lease was subject to a rent review date on each anniversary of the term of the Lease. 7 Paragraph 7 of the Applicant's points of claim states: "7. The annual rental referred to in Item 12 of the lease of $37,800.00 was subject to a rent review date on each anniversary of the term of the Lease.

(a) The Applicant relies upon the wording of Item 12 of the Lease, namely the words "at the new yearly rent beginning on each review date by weekly instalments of 152 of the new yearly rent"; (b) Alternatively, the Applicant says that the Respondents are estopped from denying the annual CPI rent reviews on the basis that rent reviews were conducted during the term of the lease, that the First Respondent knew of this by receiving rent review notices and by paying rent higher than the initial rent referred to in Item 12, and that the Applicant assumed that the First Respondent would continue to adopt that course of dealing of paying the higher rent; (c) Alternatively, the Respondent is estopped by representation from denying the annual CPI rent reviews, namely that the First Respondent was silent and deliberately refrained from alerting the Applicant to its interpretation of the terms of the Lease in respect to an annual CPI rent review, and did so whilst the First Respondent was aware of the Applicant's assumption as to those Lease terms and the Applicant has upon that representation assumed that the First Respondent would continue to adopt a course of dealing of paying a rent higher than the initial rent referred to in Item 12 of the lease; (d) Alternatively, the Applicant is entitled to a rectification of Item 15 of the Lease by deleting the figures "31.12.2003, 31.12.2008" and inserting in lieu the words "each anniversary of the commencement date". With respect to rectification the Applicant relies upon: - (i) The facts pleaded in paragraphs (a) to (d); (ii) An Agreement antecedent to the Lease that the annual rent would be reviewed each year by CPI. The agreement was oral and was made at Hamilton between Father Nevio Capra and Reverend Anthony Fregolent on behalf of the Applicant and by the Second and Fourth Respondent on behalf of the First Respondent. The Applicant relies upon the documents referred to in paragraphs (iii) & (iv) below (iii) The words in a Disclosure Statement acknowledged on 1.9.1997 by the Third Respondent on behalf of the First Respondent namely the words "Rent Reviews CPI annually"; (iv) A letter from the Applicant to a Mr. Palmeri dated 21.2.1998 given to the First Respondent on or about 6 March 1998 and the Applicant refers to the words at paragraph 8 of that letter "increase by CPI each year and market review at end of each 5 year period." 8 The Applicant's claim is set out in paragraphs 9 to 17 of the points of claim as follows: "9. The First Respondent has paid only $176,936.61 in rent and the Applicant claims the balance of $23,236.60. Interest 10. Pursuant to clause 5.1.5 and Item 14 of the Lease the First Respondent is required to pay interest at the rate of 12.5% upon the rental arrears. The Applicant claims interest from 1 July 2002 at $7.9577 per day and continuing. Legal Fees 11. Pursuant to clause 5.1.8 of the Lease the First Respondent is required to pay for the landlord's reasonable legal costs relating to the default of the tenant in not paying the rental arrears. The Applicant claims from the First Respondent legal costs in the sum of $6,000.00 to-date and an indemnity for the balance of the Applicant's legal costs until payment in full of the rental arrears and interest claimed above. Guarantee Claims 13. The Applicant claims from the Second Respondent all of the above amounts claimed against the First Respondent. 14. The Applicant claims against the Third Respondent all of the above amounts claimed against the First Respondent. 15. The Applicant claims against the Fourth Respondent all of the above amounts claimed against the First Respondent. 16. The Applicant claims against the Fifth Respondent all of the above amounts claimed against the First Respondent. 17. And the Applicant claims costs." 9 The Applicant's rent claim was subsequently amended and is calculated as follows: "Rent for the term (5 years) $200,173.21 Less paid $182,282.06 Balance $17,891.15" 10 The Applicant submits that it is appropriate to calculate interest on the arrears of rent from 13.11.2002, being the date that Vodap stopped paying rent. The Applicant also claims $2,744.56 for water usage plus interest on that amount at 12.5% from 11 July 2003, the date of service of the affidavit of Mr. Randolph Rossi where this claim was first set out. 11 The Applicant also seeks an order as to costs and submits that it is entitled to its costs contractually pursuant to clause 5.1.8 of the Lease. That clause provides: "5.1 the tenant must pay to the landlord or as the landlord directs- 5.1.8 if the tenant defaults, the landlord's reasonable legal costs relating to the default". 12 The respondents deny liability for the amounts that the Applicant seeks. As a set off against any money claimed by the Applicant or in the form of a cross-claim, Vodap claims the cost of cleaning of the rear common area of the Applicant's building. Vodap asserts that the Applicant failed to clean all of the common areas of its property, specifically the rear entry stairs and foyer and as a consequence Vodap had to perform the cleaning. Notwithstanding that Vodap carried out this cleaning, the Applicant continued to claim payment for cleaning as an outgoing from Vodap. 13 Vodap asserts that it is entitled to payment in the sum of $2,625 for cleaning of the Applicant's property. Background 14 The Applicant commenced proceedings in the Local Court at Newcastle by Statement of Liquidated Claim issued 14 January 2003. The amount then claimed was $16,942.27 plus interest and certain costs. The respondents filed a defence dated 3 February 2003 denying liability. The respondents also filed a Notice of Motion dated 5 February 2003 seeking to strike out the claim or alternatively that the proceedings be transferred to this Tribunal. That motion was heard on 6 March 2003 and the Applicant consented to the transfer. The matter was referred to mediation but that mediation was not successful. 15 The matter was listed for hearing at Newcastle and was heard over two days on 17 October 2003 and 9 December 2003. Applicable legislation 16 It is common ground that the Retail Leases Act 1994 ("the Act") governs the Lease. As indicated above the Applicant asserts that it is entitled to a rectification of Item 15 of the Lease the Applicant's claim is lodged pursuant to section 70 of the Act and relates to a 'retail tenancy dispute'. The expression retail tenancy dispute' is defined in section 63 of the Act. Section 63 falls within Part 8 of the Act which is headed "Part 8 - Dispute resolution". That section relevantly provides: "63 Interpretation (1) In this Part: retail tenancy dispute means any dispute concerning the liabilities or obligations (including any obligation to pay money) of a party or former party to a retail shop lease or former lease, being liabilities or obligations which arose under the lease or former lease or which arose in connection with the use or occupation of the retail shop to which the lease or former lease relates. Tribunal means the Administrative Decisions Tribunal of New South Wales established by the Administrative Decisions Tribunal Act 1997." 17 The expression retail tenancy claim' is defined in section 70 of the Act as follows: "Division 3 - Determination of claims by Administrative Decisions Tribunal 70 Definitions In this Division: retail tenancy claim means any of the following: (a) a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned, being: (i) a claim for the payment of a specified sum of money, (ii) a claim for relief from payment of a specified sum of money, (iii) a claim for the doing of specified work or the provision of specified services, (iv) a claim for the surrender of possession of specified premises, (v) a claim for assignment of rights under a lease or for a declaration that a lessor is not entitled to withhold consent to an assignment of the rights of a lessee, (vi) a claim for relief against forfeiture, (vii) a claim regarding the rectification of the lease, (viii) a claim regarding the invalidity of a lease for inconsistency with this Act or the regulations, (ix) a claim for a declaration of the rights, obligations and liabilities of the parties under a lease, (x) without limiting the generality of subparagraph (i), a claim for compensation under section 10, (b) an application under section 19 (3) or 31 (3) by a specialist retail valuer, (c) a claim against a specialist retail valuer under section 19A (3) or 31A (3) for compensation for loss or damage suffered as a consequence of the use or communication or divulging of information." 18 The powers of the Tribunal in relation to retail tenancy claims are set out in section 72 of the Act as follows: "72 Powers of Tribunal relating to retail tenancy claims (1) In proceedings for a retail tenancy claim lodged with the Tribunal under this Part, the Tribunal is empowered to make any one or more of the following orders that it considers appropriate: (a) an order that a party to the proceedings pay money to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, (b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings, (c) an order that a party to the proceedings: (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of a lease, or (ii) surrender possession of specified premises to another person, or (iii) assign his or her or its rights under a lease to a specified person, or (iv) do or perform, or refrain from doing or performing, any specified act, matter or thing, (d) an order granting a party to the proceedings relief against forfeiture, (e) an order, by consent of the parties, requiring the parties to the proceedings to rectify a lease, (f) an order: (i) declaring any provision made by a lease to be void for being inconsistent with this Act or the regulations, or (ii) declaring that a lessor is not entitled to withhold consent to an assignment of the rights of a lessee, or (iii) declaring the rights and liabilities of the parties under law, whether any consequential relief is or could be claimed or not, (g) such other order, in the nature of an interlocutory order of a kind referred to in paragraphs (a)-(f), as the Tribunal considers proper to be made in order to resolve or assist resolution of the dispute between the parties. (2) The Tribunal may make such ancillary orders as it considers necessary for the purpose of enabling an order under this section to have full effect. (3) The Tribunal may impose such conditions as it considers appropriate when making an order under this section. (4) The Tribunal may make an interim order under this section pending final determination of a claim, if it appears to the Tribunal desirable to do so." Preliminary issue 19 The Applicant argues that the Tribunal can hear and determine the issue regarding the rectification of the Lease. The Applicant contends that section 70 of the Act gives this Tribunal power to rectify a lease and that section 72 of the Act does not limit its jurisdiction. The respondents rely on the decision of Judicial Member Davidson in the matter of Prasad & Anor -v- Fairfield City Council [2000] NSWADT 164 as authority for the principle that the Tribunal is unable to rectify a lease where there is no agreement between the parties. The respondents conceded that the Tribunal could hear evidence but argue that the power to hear evidence is not the same as power to make the ruling that the Applicant seeks. 20 The terms of sections 70, 71 and 72 of the Act indicate that the Act is designed to enable disputes in connection with retail leases to be determined in totality by the Tribunal. The provisions of section 75 of the Act underline the general approach that retail tenancy disputes should be dealt with by the Tribunal rather than by the Courts. The Tribunal should deal with all disputes within its powers, however in order to determine a retail tenancy dispute the Tribunal must find the power to do so within the provisions of the Act. It is incumbent upon the Tribunal to see that it acts within the powers granted to it. The Tribunal cannot be given jurisdiction by consent of the parties. 21 The Applicant seeks orders for the rectification of the Lease and for the payment of a specified sum of money. Part 8 of the Act gives the Tribunal jurisdiction to deal with certain retail tenancy claims. Those claims must be in connection with a liability or obligation with which a retail tenancy dispute is concerned. As previously noted, a retail tenancy dispute concerns the liabilities or obligations which arose under a lease or former lease or which arose in connection with the use or occupation of the retail shop to which the lease or former lease relates. 22 It is not in dispute that the Premises are a retail shop within the meaning of the Act. In Prasad Judicial Member Davidson considered that the words "in connection with the use or occupation" should be given a wide interpretation. I agree with that approach. I am satisfied that the dispute before the Tribunal arose in connection with the use or occupation of the retail shop. I am also satisfied that there exists a retail tenancy dispute within the meaning of that term as defined in section 63 of the Act. 23 As a party to the Lease the Applicant may lodge a retail tenancy claim. Pursuant to section 70(a)(i) and 70(a)(vii) of the Act a claim for the rectification of the Lease and for the payment of a specified sum of money is a retail tenancy claim. In SO Lovely Foods Pty Ltd v Macquarie Bank Ltd Commercial Tribunal of NSW, 28 March 1996 unreported, the parties disagreed on the method of determination of the rent at the commencement of the option term. The Tribunal had to determine the rental on a proper construction of the rent review provisions in the lease. Several problems and ambiguities in the rent review clause were identified and the Tribunal considered the parties' objective intentions as expressed in the lease. The Chairman of the Tribunal, Mr. Cavanagh, held that this dispute was a ''retail tenancy claim'' in connection with a ''retail tenancy dispute'' and that the Tribunal had jurisdiction. I agree with Chairman Cavanagh's view. Applying that principle to the present matter it follows, in my view, that the Applicant is entitled to bring the claim it has brought. 24 In Prasad Judicial Member Davidson considered the extent of the Tribunal's jurisdiction with respect to rectification of leases. The Judicial Member stated at paragraphs 26 - 32 of his reasons: "26 The parties have not debated before me the aspects of rectification, any aspects relating to the requisite criteria and principles relating to rectification of leases. The respondent has been content simply to put its ground of objection upon the basis that the Retail Leases Act 1994 gives no power to the Tribunal in respect of the rectification of leases. Common mistake, mutuality and all types of questions are involved in considering rectification. 27 The aspect of whether or not the question of rectification is one which is able to be relied upon by the applicants assumes, in view of the position as outlined above, substantial importance in the present matter. If it is able to be relied upon then it is my view that the matter ought to be dealt with as a factual matter and determined after hearing the whole of the evidence. If it is not able to be relied upon then it is my view that having regard to the aspects outlined by me above the first question should be answered in favour of the respondent. 28 The Retail Leases Act 1994 contains two sets of provisions in part 8 headed "Dispute resolution" in respect of determinations of claims by the Administrative Decisions Tribunal which require to be analysed. As stated by me if the respondent is successful that rectification cannot be considered by the Tribunal then it is my view that the terms of the lease do not preclude competition and the respondent must succeed on that point. However if rectification can be considered then in my view the Tribunal should hear the whole of the matter and deal with the matter as a factual situation at the end of the case having regard to the whole of the evidence. Indeed, as outlined by me above, that is what the respondent essentially asserts in this matter, that what the applicants' position is, that rectification must be relied upon and the Tribunal has no powers in respect to that. [sections 70 and 72 of that Act are set out in full] 29 The respondent submits that in view of the terms set out above of section 72(1)(e) providing that an order can only be made by consent in the proceedings to rectify a lease, then the Tribunal is not in a position to hear anything further in the present matter in respect of the aspect that the non-competition of other shops is a vital part of the lease itself and a term of the lease. The words used in section 70 of the Act are words which grant jurisdiction to the Tribunal to hear the types of claims referred to in them. In section 70(vii) a claim regarding the rectification of the lease is specified without any limitation. That, however, is contrary to the wording contained in section 72(1)(e) referred to above. Both sections in my view are jurisdictional sections, power and jurisdiction each have the meaning of jurisdiction and are interchangeable in various legislation, however, in this particular instance section 70 obviously contains the delineation of the jurisdiction of the Tribunal and section 72 obviously gives the Tribunal the power to make particular orders to more appropriately exercise that particular jurisdiction. 30 Having regard to the width of section 63 of the Act previously referred to, and the overall legislative claim provisions and the structure of the Act itself, it is my view that the Tribunal is empowered with jurisdiction to hear evidence and go into matters which reflect upon the aspect of rectification and may appropriately be given effect to in other ways by the provisions contained in the Act itself. It necessarily follows that if the legislature had intended anything else, apart from the context in which the claim provisions are enacted, that would have been stated in section 70, which is really the jurisdictional matter so far as a claim is concerned. 31 The other section, namely, section 72, is merely an empowering provision as to appropriate orders to more effectually exercise the jurisdiction granted. However, jurisdiction is granted in respect to the claim of rectification without restriction by section 70 of the Act. In addition to that, jurisdiction is granted and is reflected again in section 72 of the Act to make and to claim a declaration of rights and liabilities and obligations of the parties under law whether any consequential relief is or could be claimed or not. That fits in with the overall intention that the Tribunal can hear evidence and has a wide jurisdiction to make any type of declaration giving effect to disputes and liabilities, both under a lease and disputes and liabilities in respect of the use and occupation of the premises. 32 It follows accordingly from that that the aspect of a term of the lease must, in my view, as an appropriate matter, be determined factually and in the light of the whole of the evidence in this particular matter and there is ample power to give effect to that in the Act itself either by awarding a claim for damages, or making an appropriate declaration, or dealing with it by way of other orders. The restriction in section 72, as stated above, is not reflected in section 70 which is the jurisdictional section. Section 72 is ancillary to section 70 and simply refers to the casting of the orders after the claim is heard." 25 In my view, the Judicial Member has correctly stated the extent of the Tribunal's jurisdiction in regard to this issue. In order to ascertain whether the orders that the Applicant seeks should be made, the whole of the evidence relating to the particular issues must be considered. Indeed the matter proceeded on the basis that the evidence should be presented and the Tribunal would then determine the issues if jurisdiction were found. Accordingly, I will now consider the evidence presented at hearing. The Applicant's evidence 26 The Applicant relied upon the affidavits and testimony of Mr. Rossi, the manager of Castle Realty Property Group ("Castle"), the agency that manages the Premises on behalf of the Applicant; Ms. Leeanne Elliott, an employee of Castle; Rev. Father Anthony Fregolent who, until about 1 May 2003 was the Provincial Superior of the Applicant; and Mr. John Palmeri, the solicitor for the Applicant who had the conduct of the Lease transaction on behalf of the Applicant. Each of the Applicant's witnesses appeared and was cross-examined. 27 Mr. Rossi stated that Castle acted as agent for the Applicant with respect to the consent by the Applicant to an assignment of an earlier lease to the Premises from former lessees to Vodap, and the grant of the Lease. Castle also managed the Lease at all relevant times with the exception of a period when Vodap paid rent directly to the Applicant. Mr. Rossi was involved personally in the management decisions and acts of Castle during that time. 28 Mr. Rossi stated that in August 1997 he had discussions with Reverend Fregolent on behalf of the Applicant and with Domenico on behalf of Vodap. Arising from those discussions he wrote to Mr. Palmeri on 29 August 1997 instructing him to prepare a Lease which, inter alia, provided for the rent to be reviewed only by market review at the end of the third year of each period. Very shortly afterwards, a rent review by way of annual CPI was proposed by Domenico and on 1 September 1997 he wrote out a disclosure document providing for rent to be increased each year by CPI. Mr. Rossi said that this document became the agreed terms of lease to be granted by the Applicant to Vodap. 29 Mr. Rossi stated that on about 10 September 1997 he telephoned Mr. Palmeri and had a conversation with respect to CPI. He told Mr. Palmeri that the situation had changed since his 29 August 1997 letter and that CPI increases would apply each year. He said that he advised Mr. Palmeri that Vodap has signed a disclosure statement to that effect. 30 A letter from Mr. Palmeri to Mr. Rossi dated 11 September 1997 confirms that the Lease terms were to be in accordance with the disclosure statement. A letter from Mr. Palmeri to Reverend Fregolent dated 6 February 1998 also refers to CPI increases. 31 A letter from Reverend Fregolent to Mr. Palmeri dated 23 February 1998 refers to a meeting with Vincenzo and Domenico in which it was agreed that there would be annual CPI increases and market review at the end of each 5 year period. 32 A letter dated 6 March 1998 from Mr. Palmeri to the respondents' solicitors, Turnbull Hill Partners, refers to further contact from "Mr. Macchia" in relation to negotiations for amendments to the Lease. A letter dated 10 March 1998 from Turnbull Hill Partners to Vincenzo refers to Mr. Palmeri's letter and seeks instructions. Further correspondence between the parties over the following months of 1998 appear to reflect agreement that there would be annual rent adjustments on the basis of CPI. The execution and registration of the Lease was subsequently achieved. Vodap's solicitor calculated stamp duty and stamped the Lease. 33 Mr. Rossi stated that the previous tenant had paid rent directly to the Applicant and that the same approach was adopted with Vodap for a period of time. After the rent was paid through Castle, Castle issued rent review notices with CPI adjustments. He said that Vodap never protested to Castle about the rent being reviewed by CPI until he received a letter dated 24 January 2003 from Turnbull Hill Partners. Mr. Rossi stated that Castle erred in its calculations, for example by using the wrong CPI quarter. He recalculated the rent due and set out the results of his calculations in his affidavit. 34 Mr. Rossi provided a schedule of what he stated was the rent actually paid by Vodap. Under cross-examination he stated that the schedule was prepared from Castle's ledger but that ledger is not in evidence. Nor is there any indication with respect to whether the payments made included payments for outgoings. 35 With respect to the Applicant's claim for water usage Mr. Rossi stated that on 27 January 1998 Castle arranged for a separate water meter to be installed to the Premises. He further stated that sub-meters are not read by the water board and that water usage was not included in Castle's budgeted outgoings. 36 Reverend Fregolent stated that he was involved in negotiations for the Lease in about September 1997 and his recollection is that at that time it was intended that the rent would be reviewed by CPI each year. Several months later he had discussions with Vincenzo and his record of those discussions is set out in his letter dated 21 February 1998 to Mr. Palmeri. He said that his recollection of the effect of that conversation is as set out in that letter. 37 Reverend Fregolent said that he does not recollect that the Lease terms varied in relation to CPI from what is set out in his 21 February 1998 letter. He said that when he signed the Lease he did not understand that the rent was to be reviewed by CPI on only 31 December 2003 and 31 December 2008. Under cross-examination Reverend Fregolent conceded that he is an educated man who has no difficulty in reading English, that the Applicant had taken advice in relation to the Lease from two separate solicitors and that he had read the Lease before he signed it. 38 At all relevant times Ms. Elliott was an employee of Castle. Her duties included preparation of disclosure statements, outgoings' budgets, lease documents, rent increases, organization, supervision of repairs and maintenance and all other matters pertaining to commercial management. Ms. Elliott provided an affidavit in which she responded to assertions made in affidavits by Mrs Macchia and Domenico. Ms. Elliott disputed Mrs Macchia's assertion that Vodap increased the rental payments on or about 31 December 2000 or in or around early 2002. She also denied that Vodap never received any information relating to the outgoings. With respect to that issue Ms. Elliott referred to letters from her to Vodap dated 21 August 1999, 7 August 2000, 7 August 2001, and 15 July 2002. 39 With respect to Mrs Macchia's assertion that she had spoken with Ms. Elliott on several occasions complaining that the back area was not being cleaned, Ms. Elliott stated that she had never spoken with Mrs Macchia until in or around May 2003, when she phoned her to organise a meeting. 40 Ms. Elliott referred to Mrs Macchia's assertion that on 4 May 2001 she had written to Ms. Elliott about the quality of the cleaning of the Premises generally. Ms. Elliott stated that she never received that the letter. Castle's 'mail in' book for the month of May 2001 was produced in support of Ms. Elliott's assertion. 41 Ms. Elliott stated that on 24 January 2003, she faxed Domenico a copy of all the invoices that were held by Castle at that time. She sent a further copy of the invoices to Turnbull Hill Lawyers on 27 February 2003. Ms. Elliott asserted that she and Mrs Macchia agreed that the outstanding amount for outgoings was $10,263.14, not including CPI. She denied Mrs Macchia's assertion that she had agreed that Vodap would be credited the sum of $2,625.00 for cleaning. 42 With respect to Domenico's assertion that on more than one occasion he spoke with Ms. Elliott and requested copies of the outgoings statements and invoices, Ms. Elliott said that she provided a copy of both statements and invoices relating to outgoings, to the best of her ability. She conceded that she only provided what she had been given by the Applicant. The documents provided are incomplete and do not cover the whole period of the Lease. 43 Ms. Elliott provided a schedule, which she stated was taken from Castle's rent ledger, and correlates the amounts received from Vodap against the amount of rent and outgoings that the Applicant asserts should have been paid. This schedule asserts that Vodap had paid rent to 1 October 2002 with $657,97 in hand. Under cross-examination Ms. Elliott stated that once Castle received payments they were recorded, but where outgoings were payable payments were allocated towards the outgoings first and the balance was then allocated towards rent. The schedule records a consistent pattern of payment but the amount of rent recorded varies. The variation is explained as the result of part of the payment being allocated towards outgoings. No evidence was provided with respect to the outgoings for which the payments were allocated. 44 Mr. Palmeri was called at the last minute. He admitted that he did not have a full recollection of the events surrounding the drafting of the Lease but he confirmed the contents of his file. He stated that he had not been involved in the finalisation of the Lease as it had been referred to a second firm of solicitors acting on behalf of the Applicant. The Respondents' evidence 45 The respondents relied upon the affidavits and testimony of Vincenzo, Mrs. Macchia and Domenico. 46 Vincenzo is a director of Vodap and said that he works as an electrician. He said that he was the only director of Vodap who took part in negotiations about the Lease. With respect to the Deed, Vincenzo asserted that he never received a copy of the Deed signed by the Applicant. He also said that to the best of his knowledge Vodap never received a copy of the Deed signed by the Applicant either. He said that he had no knowledge as to whether the terms in that Deed of Variation were ever agreed by the Applicant. His evidence was that throughout the period prior to the signing of the Lease he continued negotiating with the Applicant with respect to the issue of rent review. 47 Vincenzo said that in late 1997 he formed the view that returns from the restaurant business were lower than he had expected and he sought to negotiate a lower rent. In January 1998 Vincenzo met with Fr Nevia Capra who he understood was the Applicant's property manager. He said that he told Fr Capra that he would like the rent to be lower and fixed for the term with no increases. It was always his intention to have a CPI review apply only at the end of the term and instead of a market review. He said that he did not want annual CPI increases in the Lease and that he never agreed to have annual CPI increases included. He further said that the Lease he signed was in accordance with the terms he was prepared to accept on Vodap's behalf and on his own behalf as a guarantor. 48 Vincenzo said that the disclosure statement annexed to the Deed was used as a basis for the negotiations. While the disclosure statement annexed to the Deed contained a provision for CPI increases, Vincenzo said that this was removed as a result of the negotiations. While he conceded that various items of correspondence in evidence could have accurately reflected the state of the negotiations at particular times, he continued negotiating with the Applicant and the Lease was not signed until the negotiations were finalised. Vincenzo conceded that there are some errors in the Lease but asserted that the provision relating to rent review is correct. 49 Mrs. Macchia is a director and secretary of Vodap and at relevant times her responsibilities for Vodap included managing the accounts and other financial records of Vodap and the restaurant business as well as working at the restaurant in various capacities required in a restaurant of its type. She said that she had no prior experience with a commercial lease prior to the Lease and that she had no direct involvement in any negotiations about the Lease. 50 Mrs. Macchia said that she had made arrangements with the National Australia Bank for a weekly direct debit of rent and outgoings. These payments were firstly payable to the Applicant and later to Castle. She said that she did not make payments direct to the Applicant or Castle. She said that throughout the term of the Lease she did not receive a receipt or invoice from the Applicant or Castle regularly. She assessed payments made by checking Vodap's bank statement. She said that when she received the first rent review notice in early 2000, she thought that the increase was related only to the outgoings. She said that the increase seemed to be only marginal and likely to be accounted for by an increase in outgoings. For that reason she authorised the increase in payment. She said that she continued arranging for payment increases as notices arrived on this basis. 51 Mrs. Macchia said that that throughout the term of the Lease she had observed that the Applicant's cleaners had not been cleaning part of the Premises, specifically the rear entry stairs and foyer. It was necessary for her to do the cleaning, which she did regularly about two to three times a week. She said that there were several occasions on which she spoke with Ms. Elliott complaining that the back area was not being cleaned. She also said that on 4 May 2001 she wrote to Ms. Elliott about what she thought was the poor quality of the cleaning generally. She said that on the same date she instructed Vodap's bank to reduce the amount of weekly payment to Castle to allow for a minor reduction in the outgoings payable by Vodap for cleaning. She calculates the value of the cleaning work that she carried out at $2,625. 52 Mrs. Macchia conceded there was no agreement, oral or written, about her, or Vodap's entitlement to be paid, or be entitled to deduct rent, for the cleaning of the rear entry stairs and foyer. 53 Mrs. Macchia disputed the statement in Mr. Rossi's affidavit that "although Castle invoiced the tenant for outgoings on the basis of budgeted or averaged figures, ultimately, Vodap received copies of all relevant documents evidencing the Trustees' outgoings". She provided a schedule of items relating to outgoings with which she took issue. In this schedule she asserted that some of the outgoings for which the Applicant sought payment are either not payable or are only partly payable by Vodap. 54 In early May 2003 Mrs. Macchia met with Ms. Elliott in an attempt to reach agreement as to the amount of any outstanding money owing by Vodap. She said that at the time of the meeting Vodap had not received full and proper particulars evidencing the outgoings. She further said that Vodap has still not received those full and proper particulars. On 15 May 2003 Mrs. Macchia drew a cheque in the sum of $7,638.14 payable to Castle. Mrs. Macchia stated that this was the agreed figure to resolve the issue of outgoings. 55 Domenico is a director of Vodap and was the manager of the business The Italian Centre Restaurant. He stated that he had no direct involvement in negotiations for the Lease. He conceded that he was involved in at least two meetings but gave evidence that he has limited understanding of spoken Italian and as those meetings were largely conducted in Italian he contributed little to the discussions. 56 He stated that on more than one occasion in the latter part of 2000, he spoke with Ms. Elliott and requested copies of the outgoings statements and invoices. After about three months he had not received the documents and again made the request. He said that Ms. Elliott told him that she was having trouble getting records from the Applicant. He stated that similar requests had been made throughout the term of the Lease and that neither he nor Vodap received any documents as requested. From about September 2002 he began telephoning Castle on about a weekly basis and spoke to the property manager and requested the documents. By late November or early December 2002 he still had not received any documents. On 4 December 2002 he wrote a letter addressed to Castle advising that Vodap did not propose to exercise the Lease option and raised issues about the fixtures and equipment. Domenico said that he made arrangements with the Applicant and Castle for removal of the property of the business prior to and after the terminating date of the Lease. 57 In response to Mr. Rossi's affidavit Domenico said that throughout the term of the Lease neither he nor Vodap were presented with a claim or invoice in respect of water usage. He could not give evidence on the amount of rent due, or on Mr. Rossi's calculations. Submissions 58 Mr. Hollier provided a written outline of his submissions and relies on that document. Those submissions provide in part: "Applicant's Witnesses 9. The applicant relied upon the affidavits and testimony of:- a. Randolph Rossi the manager of the managing agent of the applicant; b. Leeanne Elliott an employee of the managing agent; and. c. Father Rev. Anthony Fregolent. Additionally: d. The applicant, with leave, called John Palmeri, the solicitor for the applicant who had the conduct of the lease transaction on behalf of the applicant. Each of the applicant's witnesses were cross-examined and the applicant submits that their evidence was truthful. The witnesses Rossi and Elliott are employees of the leasing agent and are therefore one step removed from the applicant and can therefore be regarded as unlikely to colour their evidence when they have no personal interest in the outcome of the case. Rev. Fregolent's evidence was brief, but on the point of the intention of the annual CPI clause, he was unshaken. Mr. Palmeri was called at the last minute. He admitted that he did not have a full recollection but he confirmed the contents of his file, gave a plausible explanation as to why the lease was not amended, and had a distinct recollection that the 2nd respondent was present when he dictated the letter of 6 February 1998. Applicant's Case 10. The applicant has set out its claim in a Points of Claim dated 5 June 2003 at pages 27 to 30 of the affidavit of Randolph Rossi. The applicant put those pleadings to each of the respondents' witnesses in cross-examination. At least paragraphs 1 to 6 of the Points of Claim were admitted, namely the existence of the lease and the liability of the 2nd to 5th respondents as joint and several guarantors for whatever amount this Tribunal finds the 1st respondent liable. 11. The applicant has set out its claim for rent in paragraphs 19 to 22 of Mr. Rossi's affidavit except that in evidence Mr. Rossi amended his calculation by reducing the first item at paragraph 21 to $30, 080.97. Thus the applicant's rent claim is calculated as follows:- Rent for the term (5 years) $200,173.21 Less paid $182,282.06 Balance $17,891.15 12. It is submitted that this was not contradicted by the respondents and therefore should be allowed in full subject to the contention about CPI increases. The 3rd respondent was the only witness for the respondents who spoke directly to the issue: her evidence was that total payments were a figure of $161,358.71. This figure does not appear to correspond to anything. CPI Increases 13. The lease is an amended Law Society form. It has, or had, several errors and the applicant has put into evidence the whole of the file of the applicant's solicitor John Palmeri and of the respondents' solicitor Turnbull Hill to prove what are the terms of the lease. For example, the applicant submits that the Tribunal may adduce from those files, and from the evidence of the witnesses, that:- a. The lease was a Real Property Act form which did not apply as it was old system title and the form then had to be modified and resigned; b. The disclosure statement (the typed version attached to the lease), has typographical errors as to the lease period and the option periods and several blanks (notably as to rent review); c. The lease was intended to be amended in accordance with a letter from the Rev. Anthony Fregolent dated 21 February 1998 but between Mr. Palmeri and another solicitor for the applicant in Sydney (Mr. Scarcella), it was not amended prior to registration: see the letters between them dated 13 May 1998, 25 May 1998, 18 September 1998, 20 November 1998 and 24 November 1998. It is apparent from those letters that the failure to amend was an oversight. The oversight was not picked up prior to registration because the tenant's solicitor calculated and paid stamp duty rather than the landlord's solicitor: refer to page 93 of the affidavit of Mr. Rossi. d. The lease had an error at Item 15 in that it provided for CPI rent reviews only after the first year of the 2nd and 3rd terms. The respondents' evidence agrees with the applicant's position that Item 15 is an error. Each of the respondents conceded that there was an error. The 2nd respondent conceded that "there was a typo". The 3rd respondent conceded that CPI was to apply only at the end/beginning of each renewal. It was put to her that there was an absurdity. The 4th respondent conceded in his examination by Mr. Underwood that Item 15 "thought it was 1.1. 2003". 14. The applicant submits that there are several ways that the Tribunal could and should make a finding that the rent review was to be annual CPI: a. The respondent is stuck with its evidence that Item 15 is wrong. The Tribunal then has to construe Item 15 in at least the way they have put it (that the CPI review was to be at the end of each term) and then to so apply it, yields an absurd result and the Tribunal should adopt a construction which gives the CPI review clause commercial sense - see the Court of Appeal decision in Tanzone. Where there is an absurdity the Tribunal should construe the lease so as to avoid an absurdity by supplying, omitting or correcting words. The only reasonable construction is to assume that the dates at Item 15 are a drafting error and instead the Tribunal should look to the words at Item 12 which refer to the "new yearly rent" in four places and infer that on the whole, an annual review was to apply, and that such review could only have been a CPI review. b. The lease does not contain all the terms of the agreement. The applicant submits that the (i) hand written disclosure document dated 1.1.1997, attached to the deed of assignment dated 15.9.1997 and/or (ii) the letter from the Rev Anthony Fregolent dated 21 February 1998 correctly set out the agreement between the parties as to annual CPI. The applicant submits that there was an agreement as set out in the deed disclosure document, and that although the lease was renegotiated in several respects, the annual CPI term stood and that the deed (with the disclosure statement) being signed by or on behalf of the respondents, and the letter being exchanged between the parties and not resiled from, each stand as contractual documents in themselves or evidence of the parties' oral agreement. c. The said deed disclosure document and the letter dated 21 February 1998 stand as evidence of the real agreement between the parties and the lease should be rectified to give effect to the parties' intentions: see e.g. the judgement of Windeyer in Tanzone (at first instance) at paras 32 and 37. As to jurisdiction to rectify the applicant says that this Tribunal has authority … If not, the applicant asks the Tribunal to refer the rectification part of the case to the Supreme Court for orders to be made in accordance with this Tribunal's findings as to the parties' agreement. d. Estoppel: the applicant argues that there an estoppel arises against the respondents from denying the existence of an annual CPI clause. This estoppel is based upon the fact that CPI reviews took place (as admitted by the respondents in their verified defence), that the 1st respondent received the rent review notices (see pages 94 to 97 of the affidavit of Mr. Rossi), that the 1st respondent paid the higher rent as a result of the rent review, and that the applicant assumed that the 1st respondent would continue to adopt that course of dealing (otherwise it would have claimed rectification earlier and asserted its right to evict the tenant if rent was unpaid). e. Estoppel by representation: the respondents are estopped by representation from denying the annual CPI rent reviews, namely that the respondents were silent and deliberately refrained from alerting the applicant to its interpretation of the terms of the lease in respect to an annual CPI rent review, and did so whilst the 1st respondent was aware of the applicant's assumption as to those lease terms and the applicant has upon that representation assumed that the 1st respondent would continue to adopt a course of dealing of paying a rent higher than the initial rent referred to in Item 12 of the lease. If this Tribunal accepts the evidence of the applicant as to the intention of an annual CPI clause (refer e.g. to the deed disclosure document, the letters in February 1998, the evidence of Rev. Fregolent) and then marries these with the file notes of Turnbull Hill, it is submitted that it is open to this Tribunal to take a certain view of the silence of the respondents. 15. The applicant also seeks to recalculate the CPI review as it has discovered that there was a miscalculation. The applicant submits that it is entitled to do this as there is no estoppel going the other away, against the applicant, as the error was in the respondents' favour, the respondent did not alert the applicant, and the applicant is contractually entitled to a right calculation. The effect of rectification is that it relates back to beginning of the agreement. Interest on Arrears 17. The applicant is entitled to interest pursuant to clause 5.1.5 and Item 14 of the lease at 12.5% pa. As the applicant's claim stretches back over the whole period of the lease, it is difficult to calculate interest. The respondents were not on notice of the revised CPI calculations until receipt of the Points of Claim on 5 June 2003. They did however receive CPI review notices during the term of the lease. As an average, the applicant submits that it is appropriate to calculate interest on the arrears of rent from 13.11.2002, being the date that the respondent stopped paying rent. Outgoings 19. The applicant claims $2,744.56 for water usage. This claim was first set out in the affidavit of Mr. Rossi after he read the meter on 6 June 2003. The reading, and Mr. Rossi's calculation has not been contradicted by the respondents. 20. The applicant claims interest on the $2,744.56 at 12.5% only from the date of service of the affidavit of Mr. Rossi (11.7.2003). Legal Fees 22. The applicant submits that it is entitled to its costs contractually per clause 5.1.8 of the lease. Respondents' Contentions 24. The respondents have claimed that the applicant has failed to give the 1st respondent full details of outgoings throughout the term. As argued on the first day of the hearing, the applicant says that even if true (which is not admitted), the contention does not take the respondent anywhere. There is no loss to the respondents. They have not proven that any of the outgoings were false claims. 25. The respondents have claimed a set-off for cleaning in the sum of $2,625. This claim was mostly articulated by the 3rd respondent. The applicant submits that the evidence of Mr. Rossi as set out in his affidavit at paragraph 28(d) is persuasive and that either the 3rd respondent should not be believed as to the amount of cleaning she did, or that the cleaning should be regarded as an incidental thing done by the tenant which as a matter of policy could never be compensable. She conceded there was no agreement, oral or written, about her, or her company to be paid, or be entitled to deduct rent, for the cleaning of this rear area - it not to be confused with the arrangement for contract cleaners as deposed by Mr. Rossi at paragraph 28 (d) 26. Mrs Macchia conceded that the payment by her in May this year was only for outgoings. Respondents' Witnesses 27. The 2nd respondent was evasive on the first day of the hearing, particularly when questioned about the effect of the deed and the disclosure document. He would not admit that he was bound by the deed. He also sought to paint a picture of himself as an unlearned electrician. The applicant submits that the 2nd respondent was untruthful and his evidence that the annual CPI clause never applied should be rejected. Today he conceded that the letters in February 1998 were mostly correct and that the annual CPI was agreed, but that he went about renegotiating. The applicant submits that this Tribunal should see Mr. Macchia Snr as a person who despite what was agreed would go about trying to renegotiate, and that at some stage, when it was observed that the lease had errors, was prepared to keep silent about those errors. 28. Mrs Macchia also sought to minimise her understanding of things. She conceded that there was no big issue discussed with her husband about CPI during the period that Mr. Macchia Snr sought to renegotiate: this tends to show that after early 1998 Mr. Macchia had not raised the issue again and fits in with the applicant's contention that he laid low once the error in the lease was realised. She conceded that she received the rent review letters and her explanation that she thought they referred to increases in outgoings is not believable and should not be expected of a company director. 29. Domenico Macchia conceded that he could not give evidence on the amount of rent due, or on Mr. Rossi's calculations. He gave evidence that he could not understand spoken Italian well: the applicant submits that this was an attempt to make his evidence in his affidavit that "he had not direct involvement with negotiations", consistent with his concession that he was involved in at least 2 meetings. The file note of Mr. Underwood's attendance on Domenico is a telling contradiction to the Domenico's contention that he was involved minimally with negotiations. 30. A lot of the above matters go to credit and this Tribunal should not believe the evidence of the respondents about annual CPI. Other facts are the denial that CPI was ever discussed by Mr. Macchia Snr, and then Mrs Macchia conceded that at least sometimes they discussed things, but again, on a credit issue, she sought to minimise her discussions with her co-directors and family on the CPI issue in 1997,1998 and then when rent review letters were received later on. 31. My opponent did not give evidence. He was in a position to gainsay what is a potentially serious question about his file notes. It is open to this Tribunal to be bold in the absence of his evidence." 59 Mr. Underwood provided oral submissions. Dealing with Mr. Hollier's last point first, Mr. Underwood submitted that the respondents did not have a case to make. They only have a case to answer and therefore the respondents' Solicitor need not give evidence. 60 Mr. Underwood made submissions in relation to Mr. Hollier's reference to the decision of Windeyer J in Tanzone v Westpac [1999] NSWSC 478. The passages to which Mr. Hollier referred are found at paragraphs 32 and 37 of the judgement and provide: " 32 It is of course much easier to construe a document not in accordance with its words, if a mistake is so obvious that it can be rectified by including or deleting a word obviously left out or inserted such as "not". Secured Income Real Estate (Australia) Ltd v Martins Investments Pty. Ltd . (1979) 144 CLR 596; or by reading "inconsistent" as "consistent". Fitzgerald v Masters . It is not so easy to do so when the construction put forward requires the clause under discussion to be read as if the words "in the case of the first Review Date and thereafter Y as the Consumer Price Index Weighted Average Sydney All Groups Number for the quarter preceding the last Review Date" were added to it. … Claim for Rectification 37 I consider a claim for rectification would have succeeded as against the Raymonds. They are in fact cross-defendants to the cross-claim having been joined at the last moment and having filed a submitting appearance. It is, I think, clearly established that the wording of clause 2.02 does not reflect the intention of the parties. So far as Westpac was concerned its intention was formed at the time the option was entered into. It is perfectly clear on the evidence of Mr. Hunt and the evidence of Mr. Mair, that the intention was for a CPI ratchet provision as sought in the cross-claim for rectification. Nevertheless that does not determine the position, because the contract to enter into the lease, which included 2.02, was made upon exercise of the option by the Raymonds. They exercised that option on the understanding that the CPI alternative had a ratchet effect. The reviews for 1989, 1991 and 1993 were conducted on that basis. Had it been intended that the original CPI figure continued as the denominator in the fraction, the 1991 and 1993 reviews would not have been conducted on the 8% compound per annum basis. The intentions of both parties were the same, this is borne out by their evidence and by their conduct. There is no requirement for an expression of accord; NSW Medical Defence Union v Transport Industries Insurance Company Ltd (1986) 6 NSWLR 740. A case for rectification between original lessor and lessee is made out. That however is not what Westpac seeks because they seek to bind Tanzone, being a third party which has acquired the interest of the Raymonds." 61 Mr. Underwood submitted that equitable principles were raised in Tanzone. It involved construction issues and the applicant raised the issue of rectification. Mr. Underwood submitted that Tanzone should be distinguished on its facts. It was a contractual issue and a third party was involved. 62 Mr. Underwood submitted that in the present matter the whole aspect of CPI can only be resolved through rectification and the Tribunal has no power to rectify the Lease. The Applicant seeks rectification of an essential term. He argued that even if the Tribunal decides that it has the power to rectify the Lease, it would need to impose a term to which the Vodap has not agreed. If the intention of Item 15 of the Lease was to provide for an annual rent review, it poses the question as to why there are only two dates included in the item? 63 Mr. Underwood agreed that the respondents have made concessions as to errors in the Lease but gave no concession on what was agreed with respect to rent review. The respondents were firm that rent review was to be at the end of the initial term and each option period. The respondents say that it was never Vodap's intention that the Lease would provide for annual rent reviews as the Applicant argues. 64 Mr. Underwood submitted that the Applicant did not sign the Deed. Vincenzo did not concede that Vodap was bound by the deed. He continued to negotiate the terms of the Lease. In the circumstances, the parties agreed to variations of the terms of the Disclosure Statement annexed to the Deed and these variations were subsequently recorded in the written document. The Tribunal therefore should not make the rectification that the Applicant seeks. 65 With respect to the issue of rectification, Mr. Underwood referred to two decisions, as supporting the argument that rectification should be refused. In State Rail Authority of New South Wales v Ferreri (1990) NSW ConvR 55-512 rectification of a lease was refused. It was held that rectification of a contract for unilateral mistake is available only where the non-mistaken party is aware of the mistake and that the written instrument has thereby departed from the bargain the parties had reached. In Prestige Land Developments Pty Ltd v Eagle Hotels Pty Ltd (1996) NSW ConvR ¶55-764 the parties to a lease agreed to changes concerning the amount of rent payable by the lessee. They then recorded their agreement in a registered variation of lease. However, the terms of the variation were different to the original agreement. The Supreme Court ordered that the variation be rectified. 66 Mr. Underwood submitted that the party seeking rectification bears a heavy onus to establish the error and the existence of the agreed term that should be imposed by rectifying the instrument. He further submitted that the correspondence confirms that there was no firm agreement until the Lease was signed. Mr. Palmeri admitted that he didn't draft the Lease but that the Applicant relied on solicitors in Sydney. Reverend Fregolent admitted that he is an educated man. He further admitted that he read the Lease and that two solicitors advised him before he signed it. 67 Mr. Underwood said that the issue of outgoings is a contentious one. The respondents' evidence is that they have never been given proper particulars of the outgoings. Ms. Elliott's evidence was that she didn't give the respondents everything. She only provided what she had been given by the Applicant. The documents are incomplete. They do not cover the whole period of the Lease. There is a further error in that the material given to the respondents included documents that did not apply to the Premises. Mr. Underwood submitted that it cannot be up to the respondents to know what has to be paid if the Applicant does not advise them. 68 Mr. Underwood referred to section 28 of Act and the requirement that a lessor give a lessee a written statement in each accounting period during the term of the lease that details all expenditure by the lessor on account of outgoings to which the lessee is required to contribute. He argued that such statements are still not before the Tribunal to substantiate the Applicant's claim. 69 Mr. Underwood referred to Vodap's claim for costs of cleaning the premises. He argued that the Tribunal is not a court of strict pleadings. Vodap has provided the details of this claim in Mrs Macchia's affidavit. It is therefore not a quantum meruit claim. He submitted that the Lease places an obligation on the Applicant for cleaning of the premises. Alternatively, he argued that if Vodap is not entitled to claim for the cost of cleaning, then the Applicant would not be entitled to claim for the cost of cleaning if the work was not done. The respondents do not know the amount of the outgoings attributed to cleaning and therefore have attempted to quantify this amount. While Castle told the respondents the amount to be paid for outgoings, there was no apportionment of those amounts. 70 The Applicant, by its agent, made a claim for water usage six months after the end of the Lease. Mr. Rossi's affidavit sets out a claim for water usage and also sets out what he says to be the rent and the outgoing payments required. Mr. Underwood argued that the respondents did not deny the obligation to pay for water usage, however they still do not know whether the claim is for one year, five years or any other period. Mr. Underwood urged the Tribunal to note that Mr. Rossi admitted that the schedule of payments included in his affidavit was transposed from a document in his office however the schedule was not supported by any primary documentation. 71 Mr. Underwood submits that the Applicant has failed to provide adequate particulars to allow the respondents to ascertain what if anything is owed. There is no evidence of any qualified person to assess the Applicant's assertions of what was paid or what is owed. Mr. Underwood submits that the Applicant has brought the claim and therefore the onus of proof rests on the Applicant. 72 With respect to the evidence relating to the meeting between Ms. Elliott and Mrs. Macchia, Mr. Underwood submits that the Tribunal should prefer Mrs. Macchia's evidence that they agreed on a figure to resolve the issue, with the exception of the allowance made for cleaning. Mrs. Macchia then paid the agreed amount. 73 With respect to the Applicant's claim for cost and interest, Mr. Underwood submitted that if the Applicant is to succeed, it must show that it has complied with its obligations under the Lease and the Act. He argued that it is wrong for the Applicant to claim interest when the respondents were not provided with evidence with respect to the outgoings as required by the Act. It was only when the Local Court matter was commenced that the respondents accepted the dispute. The landlord has failed to adopt the approach envisaged by the Act, that is, mediation. Therefore, the landlord should not be able to claim interest. Findings 74 As I have indicated above, it is my view that the Tribunal has the power to make some of the orders sought by the Applicant by way of an award for damages, or making an appropriate declaration, or dealing with it by way of other orders. In the circumstances I do not agree that the orders of rectification are available as there is clearly no agreement between the parties. In any event, I do not agree that this is a case in which rectification should be made. Accordingly, the Applicant's request that the matter be referred to the Supreme Court for such orders is refused. 75 On the evidence I am satisfied that there are indeed errors in the Lease. However, I am not satisfied that the intention of the parties was that the rent review was to be by way of annual CPI adjustments. I accept Vincenzo's evidence that the disclosure statement annexed to the Deed was used as a guide to negotiations and that the parties continued to negotiate with respect to the issue of rent review up until the time the Lease was signed. 76 I am satisfied that Item 15 of the Lease was an attempt to record the parties' agreement in relation to rent review, however the wrong date has been inserted. It is probable that it was intended that a rent review would occur at the end of the original term of the Lease i.e. 31 December 2002. The Lease wrongly records the review date as 31 December 2003. Notwithstanding that error, it is my view that there was no common intention that rent would be reviewed annually on the basis of CPI. 77 For completeness I will also address the Applicant's claim based in estoppel. The applicant argues that an estoppel arises against the respondents preventing them from denying the existence of an annual CPI clause. This estoppel is based upon the fact that CPI reviews took place, that Vodap received the rent review notices, that Vodap paid the higher rent as a result of the rent review, and that the Applicant assumed that Vodap would continue to adopt that course of dealing. Alternatively, the Applicant asserts that the respondents are estopped by representation from denying the annual CPI rent reviews. It is alleged that the respondents were silent and deliberately refrained from alerting the applicant to its interpretation of the terms of the Lease with respect to an annual CPI rent review, and did so whilst Vodap was aware of the Applicant's assumption as to those Lease terms and the Applicant has upon that representation assumed that Vodap would continue to adopt a course of dealing of paying a rent higher than the initial rent referred to in Item 12 of the Lease 78 In my view, these arguments are unmeritorious. Suffice to say I accept Mrs Macchia's explanation with respect to why she authorised the increased rental payments. I do not agree that the adverse view of the respondents' conduct urged by the Applicant should be drawn. Accordingly, this aspect of the Applicant's claim is rejected. 79 There was to be no rent review during the original term of the Lease. Vodap did not take up the option after the original term of the Lease; therefore there was no obligation on Vodap to pay any rent amount other than that recorded in the Lease as applicable to the original term. 80 The annual rental referred to in Item 12 of the Lease is $37,800. The total rent amount payable by Vodap from 1 January 1998 to 31 December 2002 was therefore $189,000. The Applicant asserts that the total amount that Vodap has paid is $182,282.06. Putting the Applicant's case at its highest this would leave rent arrears of $6,717.94. However, on the evidence before me this calculation would have to be considered dubious at best. The calculation of the amount of arrears, if any, is inextricably linked to the amount of outgoings for which Vodap was liable. This itself is a highly contentious issue. 81 There are no primary documents in evidence to support the Applicant's assertions regarding outgoings. No primary documents have been produced to demonstrate how allocations have been made towards those outgoings or to substantiate the Applicant's claim of rent arrears. The respondents are left in the position where they are unable to carry out their own independent assessment of the Applicant's assertions. Similarly, the Tribunal is unable to carry out such an assessment. On the evidence before me I am unable to assess the amounts that Vodap was liable to pay towards outgoings. I am therefore unable to calculate whether the amounts that Vodap has paid has satisfied its obligations under the Lease. The evidence presented by the Applicant's witnesses is simply inadequate to substantiate the Applicant's claim. For this reason the Applicant's claim for $2,744.56 for water usage must fail. 82 The Applicant's claim for rent arrears is founded on the assertions that rent was subject to an annual CPI adjustment; that Vodap failed to pay all the rent that was payable; and that Vodap failed to pay all the outgoings that were payable. Given my finding on these issues, each of the Applicant's claims must fail. Accordingly the Applicant's claims are dismissed. 83 The inadequacy of the evidence presented by the Applicant also impacts on the ability of Vodap to prosecute its claim in relation to cleaning costs. Vodap asserts that it is entitled to payment of $2,625 for cleaning of the Applicant's property. On the evidence I am satisfied that the Applicant failed adequately to perform its cleaning obligations. The Applicant therefore was not entitled to claim the total of the amount of outgoings attributable to cleaning. However, I am also satisfied there was no agreement that entitled either Mrs. Macchia or Vodap to request payment for the cleaning of the rear entry stairs and foyer. In my view, Vodap would be entitled to recover from the Applicant that portion of the outgoings that was attributable to the cleaning that the Applicant was obligated to carry out but which it failed to carry out. 84 Notwithstanding that view, I have no evidence from which I can calculate the appropriate apportionment. The onus is on Vodap to substantiate this claim but has been unable to provide evidence that would allow me to make the orders sought. In the circumstances, if the parties are unable to agree on the amount of the outgoings attributed to the cleaning work for which the Applicant was liable but which it did not perform, I invite Vodap to provide further evidence on this issue. If Vodap accepts this invitation, any further evidence and submissions on the issue is to be filed and served within 14 days of these reasons. Any material that the Applicant wishes to provide in reply is to be filed and served within 28 days of these reasons. Unless the parties request to be heard further on this issue, I propose to then finalise the matter on the basis of any material that is before me after 28 days of these reasons. Interest and Costs 85 The Applicant has sought an award of interest on the amounts said to be outstanding and also sought an order for costs. Given my findings, no award of interest is warranted. 86 The Tribunal s power to award costs is governed by section 88 of the Administrative Decisions Tribunal Act 1997. Under section 88 of that Act, the Tribunal may award costs only "if it is satisfied that there are special circumstances warranting an award of costs". The parties have not addressed on the matter of costs and it is appropriate that they be given the opportunity to do so. In the absence of any agreement between the parties in relation to the issue of costs, each party is invited to file written submissions within 28 days of the date of these reasons. Orders

1. The application brought by the Trustees of the Pious Society of St. Charles is dismissed.
2. In the absence of any agreement between the parties in relation to the amount that Vodap should be entitled to recover in relation to the cost of cleaning, each party is invited to file further evidence and submissions. Any further material on which Vodap relies is to be filed and served within 14 days of these reasons. Any material that the Applicant wishes to provide in reply is to be filed and served within 28 days of these reasons.
3. Each party is invited to file written submissions in relation to the issue of costs within 28 days of the date of these reasons.
4. Leave is granted to either party to have the matter relisted for further hearing on the matters that remain outstanding. Any application for relisting is to be filed within 28 days of the date of these reasons.

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