<Last week we looked at a landlords rights under a commercial lease where the tenant left the property and stopped making rental payments mid way through a lease.
Our firm brought the matter before the Tamworth Local Court before the lease term expired.
In short there were three periods in which the court had to consider the landlord’s right to damages under the lease. To recap they were as follows:
the time between the tenant ceasing to make rental payments and surrendering the keys;
the time between the tenant surrendering the keys and the date the matter was brought before the court; and
the time between the court date and the end of the lease which was not due to expire for a further six months.
In the first period, the tenant simply owes the landlord the rent not paid, as discussed last week.
In regard to the second period, the landlord could recover the unpaid rent because he was entitled to be compensated as though the contract had been completed without default. During this period however, the landlord needed to show that he had taken reasonable steps to mitigate his loss. This meant demonstrating that steps had been taken to encourage other tenants to lease the empty premises.
The third period is legally tricky. For that period, the court could not be sure that the landlord would continue to advertise the property or that the premises would remain empty.
There is no NSW case law on the point. We researched and relied on a Western Australian case of Luxer Holdings v Glentham which stated that:
Where the matter is decided in court before the term of the lease expired, the normal damages are the total rent that would otherwise have been paid, less any amount the landlord has, or is likely to obtain, as profits from the use of the premises until the date the lease would have otherwise expired.”
We were able to prove that the landlord had taken all possible steps to mitigate its loss up to the date of the court hearing and that it was unlikely that the landlord would obtain any profit from the premises between the date of the court hearing and the expiry of the lease.
Our client was awarded the full value of the rent that he would have been paid had the tenant stayed in place until the end of the lease.
Should you wish to discuss any aspect of commercial leasing please contact Everingham Solomons, because Helping You is Our Business.
An interesting legal point arose recently in a case that I conducted in the Local Court. The question centred around the damages that a landlord is entitled to recover from a commercial tenant that breaches a lease.
Six months into the lease the tenant stopped making rental payments. Nine months into the lease, the tenant surrendered the keys to the premises and moved out.
Court proceedings were brought by the landlord and when the matter came before the Tamworth Local Court, about six months of the original lease term remained yet to expire.
The court had to consider whether the landlord was able to recover from the tenant, rental payments for three separate periods:
the time between the tenant ceasing to make rental payments and surrendering the keys;
the time between the tenant surrendering the keys and the date the matter was brought before the court; and
the time between the court date and the end of the lease which was not due to expire for a further six months.
Leases are contracts. There are two general contractual principles which have relevance.
Firstly, where a contract is unlawfully terminated by one party, the other party is entitled to recover damages so as to place him or her in the position that he or she would have been in, if the contract had been completed .
Secondly, the aggrieved party must take reasonable steps to mitigate his/her loss. You cannot claim for a loss that you have not attempted to avoid.
In respect to the first period of time, the application of the law is relatively simple. The tenant owes the landlord money just like a debt. The landlord cannot mitigate their loss because the tenant was still in the premises.
Establishing the landlord’s rights to damages in the second and third periods is a little more complex and requires further explanation which will be explored in an article next week.
If you have any questions regarding commercial leases, please do not hesitate to contact Everingham Solomons because, Helping You is Our Business.
Fiduciary relationships are common in day to day life and especially common in the world of business. However, they are the result of a legal principal that is not well understood.
If you are an employer, a partner in business, a company director, a beneficiary under a trust, or someone that engages a real estate, property, insurance, finance or any other kind of agent, chances are that you have the benefit of a fiduciary relationship, without even knowing it.
A fiduciary relationship is a bond between parties which is imposed by the law of equity. It does not require the parties to agree that such a relationship exists or for the parties to do anything at all.
Broadly, a fiduciary relationship is where one person, the principal, places the utmost faith and trust in another, the fiduciary, such that the fiduciary is to act, not for his own benefit, but for the benefit of the principal.
A fiduciary must not profit from his position as a fiduciary without obtaining the fully informed consent of the principal. In the event that a fiduciary acts in such a way that they obtain a benefit at the expense of their principal, the principal is entitled to sue the fiduciary for the breach of the fiduciary duty.
If you have employed someone, and in that employment, you trust them with the information that is at the root of the goodwill of your business, for example, client lists, service schedules or trade secrets and that employee leaves you and then uses that information to their own benefit, you may have a right to redeem the employee’s profits, relying on the breach of a fiduciary relationship.
Another situation in which a fiduciary relationship will often exists is between business partners acting together. In the event that they jointly formulate a business plan and then one partner abandons the other and uses the ‘partnership knowledge’ to their own exclusive benefit, usually by starting their own business, then the abandoned partner is likely to have a right against the other for breach of the fiduciary relationship.
If you employ an agent to act on your behalf, in matters that require their specialized skill and expertise, and you subsequently find that they placed the interests of another person higher than your own interests, then it is likely that a fiduciary relationship has been breached.
Where two people come together, on equal footing, to reach a business agreement, that association will not normally cause a fiduciary relationship to arise. What is generally required is some sense of vulnerability on behalf of the principal, such that the principal is relying on the skill of the fiduciary, or trusts the fiduciary to act for the principals benefit.
Mere commercial transactions such as those between a lessor & lessee, manufacturer & distributor, or banker & customer, will not normally cause a fiduciary relationship to arise because there is no special vulnerability of one party.
To discuss fiduciary relationships and their role in business further, please contact Everingham Solomons, because Helping You is Our Business.
If you are owed money by someone then you have the right and opportunity to recover that money through the court system.
If the amount of money owing is less than $10,000 the claim will generally be heard in the small claims division of the local court, which uses simplified rules to quickly and efficiently resolve the matter.
The process is initiated when a statement of claim is filed in the court and then served on the party that owes the money (‘debtor’). It is important that the statement of claim be drafted competently as it provides to the debtor an outline of the claim that they must meet.
The debtor then has the option to file a defence, which sets out there reasoning as to why the money is not owed, or why the amount owed is less than the amount claimed.
The debtor has 28 days to file a defence. If a defence is not filed with 28 days, the person owed the money (‘plaintiff’), can ask that the court make a judgment in their favour without hearing from the debtor.
If there are problems with the drafting of a statement of claim, or a defence, those problems can later hinder your case when evidence is being heard.
If the debtor responds by filing a defence, the court will try to assist the parties to come to a compromised agreement. If that is not possible the matter is given a further court date at which point the parties will have a chance to tell their stories and explain their claim or defence.
In the small claims division, both parties will generally be ordered by the court to make written statements of their version of events and to give those statements to the other party. Usually the court will then determine the dispute based on the written statements.
The preparation of written statements is a crucial step in the litigation process and it is important that all the legal elements of the claim are made out in that evidence. The failure to mention one small event or discussion can often be the difference between winning and losing the case.
Despite the importance of the preparing well drafted written statements, the hearing itself is conducted with as little formality and does not require strict compliance with the rules of evidence.
If you would like more advice about debt recovery and small claims please contact us because at Everingham Solomons Helping You is Our Business.
What happens if you enter into a contract on the basis of some representation made by the other party, and you later find that representation to be untrue?
If the representation is included as a term of the contract, the remedy is straightforward, as an action for breach of that contractual provision will usually lie.
If the representation was not included as a term of the contract, but instead existed as a statement made prior to, and separate from, the contract document, the legal rights arising are a little more complicated.
If a false statement is made about a material fact and the purpose of that statement was to induce the other party into entering the contract, then the principal of misrepresentation arises.
The false statement must be about either a past or present fact. Generally speaking, a promise as to future events, a statement of opinion, or a statement of intention is not considered to be a statement of fact and does not constitute a misrepresentation.
Similarly, silence will not normally constitute a misrepresentation without some other special circumstances.
For a misrepresentation to occur it is also necessary to prove that the false statement was calculated to induce the aggrieved party to enter the contract and that the aggrieved party relied on the false statement in so entering the contract.
If a misrepresentation is established, it can be one of either two types; innocent or fraudulent. An innocent misrepresentation occurs where the statement was false, but the party making it did not know it to be so. A fraudulent misrepresentation occurs when the party knew that they were giving incorrect information.
If a person enters into a contract on the basis of an innocent misrepresentation, then a right arises to rescind the contract; that is to get out of the contract as though it had never existed.
If the representation which induced the party to contract was a fraudulent one, then the aggrieved party still has the right to rescind the contract, but the aggrieved party can also seek damages for any loss that they suffered by entering the contract in the first place.
If you have any further enquiries, or would like to discuss any matters of contract law further, feel free to contact Everingham Solomons Solicitors because Helping You is Our Business.
The Criminal Procedure Acts sets strict time limits in which a person must be charged for a summary offence.
Summary offences are those crimes of lesser severity which must be finalized in a local court by a magistrate. Summary offences have a maximum penalty of two years imprisonment or less.
If a person is accused of a summary offence, the police must commence their proceedings against the accused person within six months of the date that the offence was said to have been committed. There are however exceptions to this general rule.
This means that two dates become critical. The first is the time of the alleged offence and the second is the time that the proceedings are commenced.
Where the offence is a single act, such as an assault, the time that the offence was alleged to be committed is straightforward.
However, where the offence is a continuous offence, meaning that it can be discontinued at will by the offender, (e.g. keeping stolen goods in custody) the offence will be taken to be committed just before the illegal act was discontinued.
The Criminal Procedure Act states that proceedings are commenced by the police or a prosecuting authority when the Court Attendance Notice (‘CAN)’ is filed in the court registry.
Often, when a person is arrested and charged for a minor offence, they are issued an on the spot or field CAN. The issuing of this notice does not however, commence the proceedings for the purpose of the Criminal Procedure Act. It may be the case that the CAN is not filed in the court registry until some time later.
In other instances, the police or prosecuting authority might spend a substantial amount of time investigating an offence before charging anyone. If this is the case it is important to ensure that any charge has been laid within the time limits set by the Criminal Procedure Act.
If you have any questions relating to summary offences please do not hesitate to contact Everingham Solomons Solicitors because Helping You is Our Business.
An Apprehended Violence Order (“AVO”) is an order of the court that restricts the behaviour of the person against whom the order is made.
A court has the power to make an AVO against someone, if the applicant or protected person has reasonable grounds to fear and in fact fears violence, intimidation or stalking.
All AVOs have a condition that the person against whom the order is made (“the defendant”) must not assault, molest, harass, threaten, stalk, intimidate or otherwise interfere with the protected person. In addition, the applicant can apply to the court for additional orders, such as those that restrict the defendant from approaching or going within a certain distance of the protected person.
An AVO is not of itself a criminal charge which means that if you have an AVO placed against you, it will not be recorded on your criminal convictions history.
However, if an AVO is placed against you and you then break the orders made by the AVO, you will be charged with a criminal offence and if convicted, that offence will appear on your criminal record. For this reason it is important that you have a clear understanding of your obligations under an AVO.
If you are the subject of an AVO application, you can either dispute that your behaviour warrants the making of an AVO, or you can agree to the AVO being put in place.
Becoming the subject of an AVO can have serious consequences when it comes to your employability. Many industries, are unable or unwilling to employ people that are named as a defendant on an AVO. Having an AVO placed against your name can also prevent you from holding a firearms licence as well as many other security licences and the like.
For this reason it is extremely important that you consult with a solicitor if someone takes out an AVO against you. Similarly, if you fear violence and hold concerns for your personal safety because of the actions of another, a solicitor can advise you on the options and best approach to apply for an AVO.
Should you have any further questions about AVOs please do not hesitate to contact one of our solicitors, because at Everingham Solomons, Helping You is Our Business.
With the festive season upon us it is important to be mindful of the laws relating to drink driving.
With 70 percent of drink drivers convicted in the local court having no previous criminal history, it seems clear that this is an offence which often catches law abiding people off guard.
It is important to remember that the limits of blood alcohol content (BAC) differ for different classes of driver.
The limit for Learner and Provisional drivers is zero. For drivers of public and heavy vehicles the BAC limit is 0.02. For ordinary licence holders the limit is 0.05.
Passengers acting as ‘supervisors’ to a learner driver can also be charged with exceeding the prescribed limit of alcohol content whilst acting as a supervisor. Being full licence holders, the supervising passenger must be at a BAC below 0.05. Such a case received some press coverage recently.
One mistake which often causes people to come before the local Magistrate, is a failure to monitor the number of standard drinks that have been consumed over a period. It is quite common for drivers to be charged with exceeding the prescribed limit of blood alcohol many hours or even the day after drinking.
The general rule of thumb to follow is that the body cleanses itself of one ‘standard drink’ each hour, although this is subject to a number of factors including the drinkers age, sex, weight and the like.
When calculating how long it will be before you are able to drive it is important to remember that each glass consumed by the drinker is not necessarily one ‘standard drink’. A ‘standard drink’ in Australia is defined as 12.5ml of pure alcohol. Many commercialized products hold more than one ‘standard drink’ in a single serving, so it is important to take note of the number of ‘standard drinks’ consumed and not, the number of cans or glasses of the beverage.
Take for example one ‘stubbie’ of full strength beer which typically contains 17.5 ml of alcohol or 1.4 standard drinks, but can vary depending on the brand and type of beer. Although a drinker might consume only two stubbies over a one hour period and expect to be able to legally drive, in fact they have consumed almost three ‘standard drinks’ and could be well above the legal limit of alcohol prescribed for driving.
It is important to note that the above calculations are general in nature. The way in which alcohol is absorbed by the body varies greatly between individuals and the advice provided above should not be relied on to calculate or estimate your BAC. The most certain way to avoid drink driving offences is to refrain from driving if you have consumed any alcohol whatsoever.
If you have any enquiries relating to drink driving please call Everingham Solomons Solicitors because Helping You is Our Business.
Last week we looked at a landlords rights under a commercial lease where the tenant left the property and stopped making rental payments mid way through a lease.
