2001 - Landlord is to repair

Then I applied myself to the understanding of wisdom, and also of madness and folly, but I learned that this, too, is a chasing after the wind.

Necessary repair work

Mr Voukelatos states that they cannot kick the Lessee out unless he is in breach of the Lease and that in no way he will consider granting the Lessee’s request for the transfer until he first carries out the necessary repair work on the wall.

03.01.01 Mr Voukelatos to Mr Ketas IAD 1, 374

“Dear Luke,

Hope you, Nick and all staff of L.J Hooker had a great Christmas and wish you all a very Happy New Year.

Hope you got my e-mail with Theo’s re Jack request on change of leasee. In principle, I agree with what Theo said, however, we can’t kick the tenant out unless he is in breach with the lease. Tell Jack he must provide answers to the questions raised by Theo ASAP but in no way will I consider granting his request until he carries out the necessary repair work on the wall first. Also, please remind Jack that he has an obligation under the lease to carry out specified capital improvements to the building other wise his rental will be increased.

If you haven’t done so already, please provide copies of rental statements for the quarter ended 31 December 2000 to my accountant Vince Choy at Auswild and Co. to enable him to complete our quarterly GST and PAYG tax. As we intend going to the UK on the 8 Jan. I would appreciate you tending to these matters ASAP.”

Vacant in structural disrepair

Mr Ketas asks Mr Voukelatos whether he should allow the Lessee to walk away from the whole thing and to be left with a vacant building in structural disrepair, which will definitely need to be attended to, and also to be potentially left with an extended period of no rent.

04.01.01 Mr Ketas to Mr Voukelatos IAD 1, 374

“I have spoken to Jack again and he will bring in a completed Contract for the underpinning and more rent. When this is on hand we will consider transfer of lease etc.”

12.12.01 Mr Ketas to Mr Voukelatos IAE 1, 375

“I have spoken to Theo Casimatis at length and we need to talk some more about the whole position. I have received the completed Contract from Jack grant and have forwarded this to Theo for his approval; the circumstances as you know are unusual. Jack has basically burnt $70 to $80 thousand dollars over the past year.

His attention has been diverted due to his other business interests at the frustration of everyone involved. Some hard decisions need to be made soon. Do you take the risk and allow him to do the structural work, where this could be more trouble than what its worth.

Do you say no to his request to have the lease transferred into the other company or agree to a transfer (where this may be opportunity to demand certain changes etc)

Do you allow him to walk away from the whole thing and be left with a vacant building in structural disrepair, which will definitely need to be attended to, and potentially be left with an extended period of no rent?

We suspect that the reason he is pushing the transfer is to allow the sale of his business to complete and then possibly walk away from Glebe!

I don’t know where he is coming from.

What concerns me is that he might walk off the job if we don’t meet any demands he make half way through the job! Nightmare stuff.

Sorry to trouble you with this but unfortunately the decisions must yours.

Regards Mr ”

Signing the contract

Mr & Mrs Voukelatos and Mr Ketas sign the $16,060.00 Rectification Contract with a $4,015.00 deposit.

30.01.01 The Contract JA 1-8, 376-83

“Schedule 1 Particulars of Contract

name    zois Voukelatos AND Vessela Voukelatos

name    Advanced Building Services Aust Pty Ltd

The Contract price is sixteen thousands and sixty dollars only. The deposit is $ 4015-“

“A.    Contract price based on lined m of contiguous underpinning. Section of underpins to be 500mm wide with depth to match existing footing.

B.   Full reinstatement of Council land to satisfaction of Council.

No allowance for survey. It is assumed the existing structure is within the boundary.

Advanced Underpinning Pty Limited hereby agrees that any outstanding monies payable to the builder by the Owner may be off-set by the Owner against rent payable by Advanced Underpinning Pty Limited to the Owner in relation to the subject premises pursuant to lease dated 22 march and the builder agrees in this regard.

Advanced Underpinning Pty Limited hereby agrees that it will make no claim under dated 22 March 2000 in respect of the premises or at law in relation to any matter in connection with working undertaken by the builder at the subject premises including but not limited to any disruption caused to Advanced Underpinning Pty Limited.”

Signatures

Owner 1                   Owner 2

Z  Voukelatos          V. Voukelatos

Executed by Builder  Executed by                                  

Advanced Building Services Aust Pty Ltd Advanced Underpinning Pty Ltd”

Represented by Agent

Mr  Ketas of L.J Hooker is appointed as agent for the Owner.

The agent must provide instructions to the builder on behalf of the Owner was required by this Contract.

Dated the 30th day of January 2001

Signed 

Z. Voukelatos  V. Voukelatos”

Amendments to the contract

Mr Casimatis requests that Mr Grant insert special conditions regarding the offset of the rental monies and the waiver of claims. He also asks Mr Ketas to ensure that he gets the relevant building contract and the set of plans. 

19.02.01 Mr Casimatis to Mr Grant JB 1-2, 384-5

We refer to the draft Building Contract and request the Following amendments:

4. “Insert additional special condition as follows:

D. Advanced Underpinning Pty Limited hereby agrees that any monies payable to the builder by the owner may be offset by the owner against rent payable by

Advanced Underpinning Pty Limited to the Owner in relation to the subject premises pursuant to Lease dated 22 March 2000 and the builder agrees in this regard.”

5. “Insert further special condition as follows: 

E. Advanced Underpinning Pty Limited hereby agrees that it will make no claim under the lease dated 22 March 2000 in respect of the premises or at law in relation to any matter in connection with works being undertaken by the builder at the subject premises including but not limited to any disruption caused to Advanced Underpinning Pty Limited by such work.

Advanced Underpinning Pty Limited will need to execute the building contract to bind it to the abovementioned conditions.”

19.02.01 Mr Casimatis to Mr Ketas JB 1, 386

“For your reference I enclose copy facsimile of even date forwarded to Jack Grant.

You will need to satisfy your self the “structural plans” referred in the Building Contract describe the works properly that you expect Advanced Building Services Aust Pty Limited to perform. You may need to attach to the Contract the quotation that Jack Grant gave you. Please advice us in this regard.

You should also satisfy yourself that the progress payments referred in the Progress Payments Schedule of the Building Contract is satisfactory.

I trust that Zois has approved the total Contract price of $16,060.00 (which is inclusive of GST).

When I hear from Jack Grant I will contact you.”

21.02.01 Mr Casimatis to Mr Grant JC 1-2, 387-8

“I refer to our telephone conversation and note that the guarantee should be varied as follows:

In sub-paragraph (a) vary “builder” to “owner”.

In sub-paragraph (a) delete “owner” and in lieu insert “builder” and the performance otherwise the “builder”. 

In sub-paragraph (b) delete “builder” and in lieu insert “owner” and similarly in the second instance in the first line. In the second line delete “owner” and in lieu insert “builder”.

In sub-paragraph (c) delete “owner” and in lieu insert “builder”.”

26.02.01 Mr Jarrett to Mr Casimatis JD 1, 389

“We act for Advanced Building Services Aust Pty Ltd and refer to your facsimiles to our client of the 19 and 21 February 2001.

With respect to your fax of 19 February 2001 our client agrees to amendments 1 and 2 however, it does not agree to 3, 4, 5, or 6.

With reference to your fax of 21 February 2001 our client does not agree to variations as set in paragraphs 1-4 inclusive.”

12.03.01 Mr Casimatis to Mr Ketas JE 1, 390

“Mr Jack Grant will attend your office and you should ensure that he has another copy of the Building Contract in exactly the same terms as the enclosed Building Contract.

In addition, Jack Grant will provide you with set of plans to be attached to the Building Contract. You should ensure that this plans specify what you expect to be completed by the builder under the Building Contract.”

“When you have satisfied yourself that the two counterpart Building Contracts are the same and proper execution has taken place, the appropriate insurances by Advanced Building Services Aust Pty Limited are in place and all rental due by Advanced Underpinning Pty Limited has been paid, you should date the two counterparts at the top of page 1 in Item 1 and hand a cheuqe of $4,015.00 to Jack Grant of Advanced Building Services Aust Pty Limited, being the deposit under the Building Contract.”

Relevant insurance cover

Mr Casimatis informs the Lessee that he is in breach of the Lease as he is in arrears of rent and that he has failed to take the relevant insurance cover.

20.03.01 Mr Casimatis to Mr Grant JF 1-2, 391-2

“We are instructed that your company has been in arrears of rent and other moneys payable under the subject Lease from 28 December 2000.”

“In addition, we note that your company is in breach of the Lease as it has not undertaken the relevant insurance cover required by the terms of the Lease in that inter alias the policy appears to be in the name of Advanced Building Services Aust Pty Limited and not in the name of your company.”

The Landlord is to repair

Mr Grant’s Lawyer informs Mr Casimatis that an Emergency Order was served some fourteen months ago and that the Landlord did not comply with the Notice within the 28-day period allowed and still has not done so.

27.03.01 Mr Casimatis to Mr Ketas JH 1, 393

“For your reference I enclosed copy of even date received from LMG lawyers.”

27.03.01 Mr Levitt to Mr Casimatis JI 1, 39-6

“While Clause 4 envisaged that the tenant would carry out works to the premises in the nature of refurbishment and renovation, it did not provide for my client to undertaken structural work.

Clause 8 provides that in the event that the Leasehold premises are damaged, the tenant is not liable to pay rent in respect of any period or part thereof when the property cannot be used on account of the damage. If the property is still useable, tough to a diminished extent, there is to be a corresponding reduction in the rent payable.

The Landlord is required to repair the damage and the Landlord’s failure to do so may result in the termination of the Lease by the tenant (Clause 8.2.4).

In the event of such termination, the right of the tenant to damage is preserved.

Shortly after 2 February 2000, the Landlord was provided with a copy of structural Engineer’s report concerning the premises, dated 2 February 2000.

My client was also provided with a letter from the same structural Engineer (J.R. Bateman of Smith Bateman & associates Pty Ltd), dated 20 February January 2000.

Although the ground floor of the premises has been occupied by a café, the first floor is not usable.

An Emergency Order No.6/2000 from Leichhardt Council, dated 22 February 2000, requiring that structural alterations to the building be made on the basis that “Building is or is likely to become a danger to the public”, was served on the Landlord by Leichhardt Council some fourteen (14) months ago. The Landlord did not comply with the Notice within 28 day period allowed and has still not done so.

The hazardous nature of the building frustrates my client’s ability to use the premises in accordance with Item 16 and constitutes a breach of the lessors' covenant for quite enjoyment, inter alias.

My client cannot inform a public liability insurer of the condition of the building and expect to obtain public liability cover, as required in Clause 8.1.1. in the sum of 10 million. Accordingly, my client’s compliance with Clause 6.3.1 is also frustrated.

My client is ready to proceed with an agreement, negotiated in principle but not yet finalized with the Landlord, to proceed to carry out the works described in the structural Engineer’s report, in consideration of being paid $16,000.00. In addition, my client would then proceed to renovate and refurbish the property in accordance with own covenant in the lease to do so.

My client’s agreement in that regard cannot be made conditional on my client’s releasing the Lessor from the consequences of its beaches of the Lease.

However, I have been instructed to propose a meeting between your good self and your client, with my client and me, to occur within the next week, the purpose of whish would be to negotiate a new dispensation in respect of the Lease and the parties’ liabilities and obligations, inter se including in respect of the rent which is the subject of your claim in para.3.

Please do not advise your client to act in accordance with your letter of 20 March 2001. I have informed my client that it would have the right under Section 106 of the industrial Relations Act, 1996 for compensation arising from the unfairness of the Lease which in Clauses 6 and 8 require my client to do things which are impracticable in these circumstances.”

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