COURT DETAILS | |
Court | Supreme Court of NSW |
Division | Equity Division |
Registry | Sydney, Queens Square |
Case number | 2017/ |
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TITLE OF PROCEEDINGS | |
First Plaintiff Second Plaintiff | Amir Bodenstein Rachel Bodenstein |
First Defendant | Zois Voukelatos |
Second Defendant | Vesella Voukelatos |
FILING DETAILS | |
Filed for | The Plaintiffs |
Contact name Contact email | Amir Bodenstein |
RELIEF CLAIMED |
39 GLEBE POINT ROAD, GLEBE
The Defendants are the Landlords of 39 Glebe Point Road, Glebe, Sydney ("39 GPR") since 1989, the roots of the poplar and olive trees in Dan Minogue Park ("Park") irrevocably damaged 39 GPR, and the Plaintiffs lease 39 GPR for 15 Years ("Deed").The First Defendant Mr Zois Voukelatos ("Defendant") is a non-practicing accountant, and the
Second Defendant is his wife Mrs Vessela Voukelatos both having dual citizenship, Australian and Greek plus also jointly owning and managing the Halliki Hotel on Lefkada Island, Greece.
A. Emergency Order: 1
a 1. Tree roots getting under
001. The east sidewall
For many years two poplar trees and an olive tree grew in the Park along the Wall and the backyard their roots caused structural and sewerage pipe damage to the building at different locations and in time also penetrating and disrupting the sandstone foundations.
The roots of the poplar tree near Glebe Point Road had cracked and lifted the Wall encroaching it by 14 cm into the Park and dislodging the front wall by 17 cm while the olive tree had split the building in two while the second poplar tree near the back had disrupted sewerage pipes.
In 1989 the Defendants buy the building and soon after they receive compensation from Council for sewerage blockage caused by the second poplar tree and later a structural engineer found the front wall to be unstable recommending it be replaced.
In 1990, the Defendant commissions PJ who reports that the front wall poses a threat to public safety and that there were many cracks in the walls including a large crack in the Wall adjoining the Park.
PJ also reports that two well-established poplar trees close to the building may have caused some of the cracking and that some cracks may be due to other factors, e.g. differential foundation movement.
The Defendant sends a letter to Council reporting that a crack, that had developed on the Wall, might be due to the tree roots getting under the foundation and moving the Wall which is very serious since the damage would require significant cost to rectify.
a 2. Some cracks are found
In October 1990, PJ advises restraining the existing front wall of the attached building no. 41 Glebe Point Road and reports that the wall of no. 39 had been demolished down to just above the first floor ceiling and had cracked from the party or common wall.
In December 1990, the Defendant files a request to Council to allow him an extension of 90 days to perform certain work relating to fire safety compliance in the coffee lounge area, the reason being that he soon would depart Australia and did not expect to return in the immediate future.
010. Work certification
In 1991, PJ certifies the completed work of rebuilding the front wall of no. 39 with temporary ties to no. 41 in accordance with the structural details shown on the Certificate dated 6 October,1990.
011. Scottish corner cafe
In 1996, Mrs Davidson purchases the "Scottish Corner Cafe" being operated at the building by Alan Calder and Sylvia Howden and then approaches the real estate agent L.J Hooker ("Agent") to ask that the owner fulfill his responsibility for the restoration of his own property.
012. Termination Notice: 1
In December 1996, Mrs Davidson leases the property for 3 years with 3 year option and in February 1997 the Agent notifies her that as per Clause 14.2 of the lease that the Owner is terminating the said lease.
013. The fourth tree
A fourth large tree is located at the back yard behind the rear wall of the building with its roots
interfering with plumbing and blocking the toilet's sewerage pipes after which the Agent lodges an application to Council for its removal and then the defective pipe is replaced.
014. Owner's consent
In 1998, Mrs Kirkpinar purchases the business from Mrs Davidson and asks for the Owner's consent to approach the Council in respect of a license for tables and seating in front and alongside the building plus a change in usage from a milk bar to a cafe.
In 1999, with the Defendants living in Greece, Mrs Kirkpinar files a Development Application ("D.A.") for bi-poled doors and two windows in the Wall to which the Defendant signs off but only if the Council passes the project and the work is carried out and paid for by the tenant.
016. Some cracks
The Agent commissions a quote for roof repair which states that the roof had been repaired often and is in poor condition plus another quote from a plumber to remove the filling and replace the rotten flooring of the first-floor bathroom while some cracks are found in the parapet wall.
a 3. Emergency Order: 1
B. A Fairy Godmother
b 1. Rotated the whole building
023. Hornets' nest
The Defendant states to Council that in 1990 there was no concern raised about the Wall and this can be confirmed by Mr Dolan i.e. if he is still working for Council, and that he will urgently address the problem and take all necessary action to see that both Orders are lifted.
025. Independent report
Consultant engineers, Rooney & Bye (Aust.) Pty Ltd find the Wall rotates in an easterly direction and bows in and out for its full length and this movement of the wall appears to have rotated the whole building.
b 2. Lock out 1: Grant
Rooney & Bye recommend a further and more detailed investigation by a qualified structural engineer to determine the appropriate course of action and that the rectification work should be carried out in the near future to ensure the Wall's stability.
028. Near future
As the matter is urgent Mr Grant’s Lawyer understands that the Defendant agreed to remedy the structural defects and he trusts that his client will not be liable to pay rent for the period that he is prevented from completing his intended fit-out works and occupying the premises.
030. Rectification quotes
Two quotes are submitted: L.S, Booth Pty Ltd, Underpinning & Rectification Specialists, for $59,000.00 to underpin the footing and jack the building, and Advanced Underpinnings Aust. PL, owned by Mr Grant, for $14,600.00 while BSB provides the drawing of the rectification plan.
031. Repair consent
b 3. A fairy godmother
C. Down Under
c 1. Carefully peruse
c 2. Council patience
The Lawyer offers a settlement with Mr Grant to enter into a Building Contract for the work required to rectify the defective Wall with Mr Grant to spend at least $75,000.00 on this plus being given a month's free rent with all work being subject to the satisfaction of Council
The Lawyer informs the Defendant that Council still requires him to undertake the rectification as soon as possible and that Council will lose its patience with him for not attending to it within a reasonable period of time and thus be in default of the Emergency Order.
c 3. Down Under
The Applications are addressed to the Agent their proposed usage being for a café or a convenience store.
My Australia
D. The Deed
d 1. Morden Paint
From 1993 to 1995, the Plaintiff works as a manager at an Australien company Pioneer Concrete Israel, while his wife, who also has expertise in marketing and managing small business, works in the hospitality industry as a restaurant manager.
In 1995, the Plaintiff becomes general manager of Dovlar Material Systems specialising in supplying the building trade and in 1999 secures contracts for completing some of the biggest special paint finishes and acoustic projects in Israel.
In 1996, the Plaintiff meets his business partner Mr Evos Primost, a talented draughtsman, designer, artist, painter and colourist and forms a relationship with the Plaintiff who in turn shares his knowledge of special paint finishes.
In March 1998, the men form an equal partnership, finalise a concept and business plan and decide that Sydney, Australia would offer the best opportunity to utilise their combined expertise after which they were granted distribution rights by Spatula Stucchi (Italy) and Nadir(Israel).
The company formed, Morden Paint Sydney Australia Pty Ltd ('MPSA') is to be a marketing platform to supply special paint finishes for prestige projects, sell and distribute imported paint finishes and provide training to trades people in the new techniques of MPSA finishes.
In October 1998, Evos moves with his family from Israel to Fairfield, NSW, close to the house of his brother-in-law Alberto who was trained by Evos in special finishes in Italy in the early 90's and who is operating a business in the painting trade.
067. Mortlake showroom
In March 1999, business entities are set up under the umbrella trading name of MPSA after which premises are leased in Mortlake, Concord comprising of studio/showroom, two offices, reception and storage rooms and then in 2000 the business premises are moved to 136 Mitchell St. Glebe.
068. Winding up Israel
From 1999 to 2001, with the Plaintiff shuttling between Tel Aviv and Sydney but his family remaining in Israel as his wife delivers a baby daughter, who is a sister for his three year old son, the Plaintiff winds up his and his partner's business and personal affairs.
Over this period, in the first three trips, the Plaintiff remains and works in Sydney for a total of five months to June 6 with Evos handling day-to-day operations and from Israel the Plaintiff monitors the business through daily phone and fax communication.
070. Park Hyatt Hotel
In 1999-2000, Morden Paint completes several prestigious projects such as the lobby and restaurant of the Park Hyatt Hotel at the Rocks and becomes recognized as a leading special paint company by designers, architects and the painting trade.
In 2000, Morden Paint completes the Ledgerwood Residence Project that won the Master Painter Association Award for Excellence in Decorative Finishes and in June, 1999 the Plaintiff comes to Sydney for the first time for a two-week visit and stays near the company premises.
During this visit Morden Paint takes part in Inter Build an annual exhibition at the Darling Harbour Exhibition Centre and in May 2000 the Plaintiff returns to Sydney for the second time for a period of two months and on departure kneels and kisses the terminal floor.
During the period from 22 March to 25 May 2001, the Plaintiff briefly returns to Sydney for two months residing at the new MP premises in Glebe while in 2001 the company wins the Master Painters Association award for Excellence in Decorative finishes for La Vigna Restaurant.
074. Morden Paint
In 2001, MPSA completes the Arnott Residence Project that later wins both the Master Painters Association Award for the Project of Year in NSW and the Decorative Material Supplied to the Project of the Year.
075. Final landing in Australia
In December 2001, the Plaintiff returns to Sydney for a fourth time with the intention of completing, within four months, the preparations for the imminent relocation of his family after August 2002 and therefore plans a return to Israel by April 2002. December 1 20
At this time the Plaintiff accidentally meets the Defendant while passing 39 GPR, a property which seems ideal for the purpose of a restaurant and residence for his family on the first floor, with the Defendant stating that he lives '10,000 miles' away and wants a good tenant and peace of mind.
077. Too good to be true
With the Plaintiff enthusiastically sharing his plans with him, he declares that: the restaurant would be a perfect vehicle for his wife to utilise her skills; the first floor is ideal to temporarily house his family and would, with the frontage and sidewall, perfectly showcase MPSA's finishes.
078. The lucky country
After a friendly rapport was established, the terms of the Lease are negotiated: five by three years at $3,684 adjusted for CPI pa; the Plaintiff to manage renovations with Defendant to sign off, and the two parties celebrate the lucky country and their agreement at the next door restaurant.
079. A friendly relationship
From 7 December 2001 to 3 January 2002, the Plaintiff meet the Defendant eight times during which Evos, who had owned a restaurant in Thailand, ventures the notion of opening a Moroccan restaurant as he knows that the Second Plaintiff is of Jewish Moroccan descent.
As there is a bad smell coming from the ground floor and no chairs to sit on most meetings, usually of one to two hours duration and at the Defendants suggestion, occur at the MP studio which is a ten minute walk from 39 GPR.
With MPSA completing the Arnott Residence project and the studio is actively making product samples for display, several meetings occur between the partners and Defendant who seems impressed by the company and a good rapport is formed between the men.
The Plaintiff deems the Defendant a pleasant and honest man to do business with which is reciprocated by the Defendant who extends an invitation to the Plaintiff and his family to visit and stay at his hotel on Leftkada Island, Greece.
Before the Core Lease Agreement is finalised, the Defendant is found to be negotiating with a prospective tenant who wants to lease the ground floor only as a convenience store.
Having had some experience in negotiating commercial leases as in Mortlake and Mitchell St., Glebe plus other commercial and legal matters in regard to MP, the Plaintiff requests that the Defendant agree to certain conditions in view of the big investment involved.
With the main conditions of the Core Lease Agreement mutually acceptable, the Defendant agrees to the Plaintiff's requests that he would pay council rates, allow the sub-lease of the premises, allow the option to sell the business and require only the provision of public liability.
086. 3x5 years, $3,684.00 monthly
With the Defendant declaring that as he resides permanently on Leftkada Island,Greece as a hotelier he is seeking a long-term tenant who will give him peace of mind, the Plaintiff reiterates that because of the large investment involved he requires a lease of at least fifteen years.
Agreeing that rent increases are linked to the CPI and between the two renewals of the options, both parties also agree to avoid the process of market valuation and to limit the five yearly rent increases to a future agreed percentage with a maximum of up to eight percent.
088. Free hand in renovations
With the Defendant residing in Greece not visiting Australia for ten years and the Plaintiff successfully operating in the building industry both parties agree that the Plaintiff would manage design and renovations with the Defendant having sign-off rights all subject to Council permission.
089. Reduced rent for six months
Estimating that it would take six months to complete a cafe/restaurant renovation and fit-out of the ground floor, both parties agree to a rental reduction for the first six months i.e. first three month's deposit, with the Plaintiff to refund fifty percent of the discount over the next two years.
090. Roof replacement
The parties agree that the Defendant would provide $5000.00 for the roof rectification but as this is not urgent plus the fact of the reduced rent, it is agreed to postpone work on the roof for six months from the date of the commencement of the Lease.
091. Plans from 1990
In 1989, the Defendant lodges a B.A. for the addition of a balcony and rear staircase to the first floor residence and the conversion of the upper rear room to a kitchen/dining room informing the Plaintiff that the work was not performed post-D.A. because he leased the premises instead.
092. Defendant offers $25,000.00
After informing the Plaintiff that he had also bought a hotel in Leftkada Island, Greece, he gives the Plaintiff the plan and drawings seeming very enthusiastic about the project offering $25,000.00 toward the completion of a similar plan in the future.
093. Johnston's report from 2001
The Defendant informs the Plaintiff that he commissioned the above report to test the structural feasibility of making a door/opening in the sidewall as the then tenant had lodged a similar D.A. which Council had rejected and that this tenant had sub-let and owed back rent.
094. Defendant skeptical
After stating that the same engineer who rebuilt the front wall did not find a problem making door openings, the Defendant is skeptical about getting D.A. as the Wall is adjacent to a public park but the Plaintiff would like to perform the work, on approval, for a two-and-a-half year lease extension.
095. Other documents?
Around 3 January 2002, the Defendant carries meetings with a plastic bag containing a sheaf of documents and sorting through them give the Plaintiff two only and being asked for any more that might be relevant replies that only these two are relevant reflecting his ideas for the renovations.
096. The lucky country
After the first and second Defendants invite the Plaintiff and Mr Primost to a celebratory dinner at the restaurant 41 GPR, the Plaintiff gives the Defendant $3,188.00 in cash being for three months reduced rent plus $300 to defray legal costs.
With the Defendant providing the Plaintiff with a receipt and premises keys, it is agreed that the Defendant's lawyer will draw up the lease contract commensurate with the Core Lease Agreement after which the Plaintiff is overjoyed and declares that: "It is for real; it is the Lucky Country".
098. Timbara restaurant
As the premises had been left vacant for months and vandalised, the Defendant is proceeding with relevant insurance claims while also collating rectification quotes for roofing, drainage and the rebuilding of the back fence.
099. Exterior
In December 2001, the Defendant informs the Plaintiff that before he left for Greece in 1990 he had rebuilt the front wall, which still displayed the former title "Timbara", due to a twisted wooden beam with the sidewall having a bend and a few patched-over cracks.
100. Interior
While it was evident that the ground floor had been a cafe/restaurant and the upstairs a residence and possibly an office, the interior had been neglected displaying broken windows, holes in the walls and floor, fire damaged carpets, loose and damaged stairs, graffiti and a bad smell.
101. Back yard and Roof replacement
The entire rear area including the yard to the back fence was in poor condition while the toilet, storage room and back yard fence were in a particularly appalling state. As the roof does not have insulation, the Defendant receives a quote for replacing the roof and supplying insulation.
102. Rebuild fence
On or around the 27 December 2001, The Defendant employs two tradesmen to rebuild the fence on the north side of the back yard with the Plaintiff being often present when the work is performed.
103. Drains
The Defendant supplies the Plaintiff with the phone number of a plumber and during three of four visits from March to April 2002, supervises the plumbing with the Defendant being invoiced directly for the work.
104. Grease trap
Having agreed that the Plaintiff would pay for grease trap servicing, cleaning and maintenance, in April 2002 he completes the job and the lingering bad smell in the kitchen area is only attributed to the lack of constant water flow but the trap is found to be quite empty.
105. Grease trap and vent
The kitchen cooking vent appears to be in good state with the Plaintiff being sure that the Defendant tells him that he had paid a lot of money for the vent and grease trap, perhaps $20,000.00
106. The renovations
From January 2002, all the focus and efforts of MPSA were diverted to 39 GPR to rush to complete the overall plan of renovation and fit-out. This plan comprised of: a first-floor front living room and three bedrooms plus a Moroccan restaurant on the ground floor.
107. Budget estimate
The Plaintiff estimates the budget for renovations, fit-out and furnishing cost of the dining area and residence between $90,000.00 and $100,000.00 including a twenty-five percent discount using his company's capabilities and also twenty-five to thirty percent of the cost in barter to MP.
108. Mr Pasqualle
MPSA submits a tender of $9,405.00 to Lamio Pty. Ltd., a medium-sized construction company, owned by Mr Pasqualle for the application of Morden Paint Crystal in three bathrooms in an on-going project in Queenscliff, NSW.
109. Reciprocal deal
As Mr Pasqualle is a reputable professional builder with over forty years experience in the trade, MP enters into a flexible reciprocal arrangement with him whereby MPSA will offer their services gratis for his assistance and advice in the 39 GPR renovations.
After his initial visit to the 39 GPR site Mr Pasqualle agrees with the Plaintiff that the tree adjacent to the park is a matter of concern and agrees to write a letter attesting to this which the Plaintiff then sends to Council along with the 25 June 2001 report of PJ.
111. Family on the first floor
At the end of January 2002, Evos, who is an ex-draughtsman and talented artist, drafts a conceptual design 'dream plan' of the restaurant occupying both floors but this is found to be a long-range option as the Plaintiff plans to temporarily house his family on the first floor.
112. Ambition sketches
As Council would not have approved many aspects of the plans, there is the possibility of later joining the first floor residence to the cafe/restaurant but the sketches merely reflect future ambitions and illustrate our dreams and to learn from valuable feedback.
113. Calling him Michelangelo
On 25 February, the Defendant seems extremely pleased with Evos's plans calling him a Michelangelo and, as no doubt the Plaintiff had engaged a structural engineer/builder in the process, if Council were satisfied then he would be happy to sign off on the work.
114. Not heritage listed
In mid-February 2002, Evos sends the existing plans as well as the dream plan sketches to Council Planner, Bruce Lay, and receives in turn a study paper showing that 39 GPR was built in the early 1880's and that it is not heritage listed.
115. Hiring PJ
After locating Phillip Johnston's contact details in his report of 25 June 2001, the Plaintiff decides to hire him and asks about general structural issues plus future options and gives the dream sketches quizzing him on the structural feasibility of the changes inherent in the plans.
116. Bend location incorrect
Mr Johnston then tells the partners that the location of the bend in the sidewall is not correct as per his report of June 2001; that the width of the proposed sidewall door opening should be reduced and that a first floor internal portal steel frame would have to be built for the sidewall.
After the Plaintiff asks him about structural possibilities of the internal support wall and cracks in the back wall, PJ informs him that the front wall was rebuilt because of a twisted wooden beam and that it was checked and found satisfactory for wind loading.
118. I have nothing to hide
On 16 January 2001, around ten days after the Defendant leaves for Greece, the Plaintiff receives a Landlord Disclosure Statement and a Draft Lease in which the premises are stipulated as being a shop in a retail shopping centre.
119. Lease received
With the Plaintiff in long discussions and negotiations of over one hundred international phone calls and faxes to and from Greece, it takes four months to finalise a Lease Contract and another four months to receive a registered Lease on 13 September, 2002.
120. Defendant stalling
Over this period the Plaintiff sends the Defendant, on the basis of legal advice, two letters outlining his concerns that were in the draft lease as he felt that the Defendant was hiding something asking him whether he was telling him all of the facts of the matter.
121. Mutual respect
The Defendant replies that he has nothing to hide and can be trusted after which, despite their differing opinions and subsequent delays, good relations are maintained and negotiations held in mutual respect.
122. Arnott's project
In January 2002, MPSA is in the final stages of a project at Jeremy Arnott’s residence, a project that later won the Master Painter Association’s Project of the Year Award while some of the tradesmen from the Arnott’s project went on to work at 39 G.P.R.
123. La Porte (the gate/port)
The preparation for the 'La Porte' restaurant and the first floor residence takes place parallel to the execution of the premises' renovations and during this time two American back-packing professional photographers,Jack and Janina, work part-time for the Plaintiff.
d 3. The Deed
Taking photos of several MP's projects and studio plus the interior and exterior of 39 G.P.R., Janina also canvasses food and beverage equipment suppliers and, on leaving, Mr Gilad Lesham takes over from her.
In March 2002, the Plaintiff begins to build a working relationship with him utilising his experience as a professional sound technician with expertise in the hospitality industry and in July 2002 he moves into the first-floor residence of 39 G.P.R. with his girlfriend, Matti.
His function is to oversee and manage the fit-out and set-up of the cafe/restaurant launch until the arrival of the Plaintiff's family but in mid-August 2002 Gilad and Matti move to the MP studio with the first-floor residence being occupied for less than five weeks.
Mr Edo Lev, who is a close friend of Gilad, is studying at a prestigious catering college in Sydney and is ideal as Chef for the 39 GPR project which he accepts and in May 2002 serves a Moroccan dinner at MP for friends and tradesmen of the project.
129. More Lease obfuscation
Knowing that the Plaintiff requires a clause inserted that allows for the usage of a ground floor cafe/restaurant and first floor residence for his family for the first two to three years, the Defendant presents a Draft Lease that permits a cafe/restaurant but omits a residential component.
131. Roof on trust
In December 2001, the Defendant receives a quote for roof replacement and insulation of $5,000.00 and agrees to defer payment for it for six months but although it was a clause of the Core Agreement did not want to include it in the Lease insisting on making it a matter of trust.
132. Free hand in renovations
With the Defendant residing in Greece and due to the Plaintiff's building experience plus MP's design capabilities, the parties agree that the plaintiff would be responsible for and have a free hand in the overall process of renovation and design without the Defendant's consent.
135. Insurance money
In Core Lease Agreement negotiations, the parties agree that on approval of the pending insurance claim for prior damage to the premises that any claim payout would accrue to the Plaintiff being the Defendant's monetary contribution toward the renovations.
With complete understanding that the Plaintiff wants to open a food outlet as soon as possible and reside with his family on the first floor, the Defendant is raising irrelevant issues in regard to the D.A., structural engineering problems, Council approval and Owner consent.
Before the Defendant departs for Greece, the Plaintiff pays him $300 plus GST towards legal preparation of the Lease and is billed for half of the legal fees regardless without consideration of the prior contribution but he chooses not to argue concentrating on more pressing issues instead.
The Defendant informs the Plaintiff that on receiving a GIO insurance payout of $4,130.00 he is deducting the August rent of $3,575.00 and is mailing the balance of $555.00 in satisfaction of the Plaintiff's prior request and the GIO regulation of passing on payouts to tenants.
On 25 September 2002, the Defendant informs the Plaintiff that due to his (the Defendant) "silly mistake" in sending the insurance refund cheque of $555.00 to the 13 Mitchell Street address, the letter returned to him in Greece.
On 13 September 2001, the Lawyer sends the Plaintiffs the original registered Lease no. 8898392 AA 1-38, commencing on 5 January 2002 and terminating on 4 January 2007 with an option to renew for a period of five years plus five years.
E. I Beg You
e 1. Danger of collapse
From February to August 2002, the Plaintiff has several meetings with officials of the Council Parks Department concerning an olive tree and the adjacent park after which they grant approval for its removal which occurs six months later.
The Plaintiff informs the Defendant about structural problems with the back and cross walls; that he is replacing seventy percent of the ceiling to the legally required fire-proof standard and that he is replacing the wiring in the electrical circuits in the relevant areas.
149. Lease extension request
After a meeting with the Lawyer in which the above problems are discussed, the Plaintiff asks the Defendant, in light of the extra work and expense incurred, to consider a five year extension of the Lease reiterating his good intentions and best efforts in regard to the project.
On or around 26 May 2002, Evos has a telephone conversation in which the Defendant agrees to their request to extend the Lease but a few days later changes his mind about the Lease extension request.
In mid January 2002, Evos and Sassa, a MPSA employee, start renovating the first floor and backyard and in the following weeks the partners become familiar with the work-site in general with the pace of renovations increasing from March to July 2002.
From January to August 2002, the gradual revelation of structural problems is concomitant with the progress of interior renovations with the first problem becoming evident at the time of the Defendant's visit to Sydney being a small crack in the back wall above the ground floor back door.
153. Crack in the common wall
Soon after the Plaintiff signs the Lease he notices raised ground around the tree adjacent to the Wall and, after starting the first floor renovations, he discovers loose bricks plus a five centimeter wide crack in the common wall from floor to ceiling.
As the interior renovation progress several more cracks and other structural defects are discovered impeding further work with many locations with MP finishes having to be removed pending resurfacing at significant cost to the Plaintiff.
155. The renovations include:
Replacing part of the electrical/lighting system.
Rebuilding the first floor bathroom and toilet.
Installing smoke alarms.
Painting of the interior (mainly with Morden Paint special finishes).
Removing of carpet from the first floor and sanding and painting the wooden floor.
Replacing ceilings with gyprock red to the requirements of fire resistance regulations.
Building fire proof gyprock partition between 39 to 41 GPR from the ceiling of the ground floor to the roof in line of the common wall.
Fixing doors.
Renovating the back yard toilet.
Reinforcing the stairs.
156. PJ's surprise
After scraping off loose render and finding previously hidden large cracks, PJ is invited back to offer a second opinion and is surprised by cracks and loose masonry in the common wall close to the front wall which were not evident in 1990 as the wall had been covered.
During this visit PJ advises filling and rendering the common wall crack, which was completed in June 2002, and the Plaintiff allays PJ's concern re any structural changes being made and possible change of usage, by denying any such intention.
During renovations seventy percent of the ceiling on both floors are removed due to non-compliance with fire regulations re dangerous electrical circuitry while in removing aluminium studs holding Masonite sheeting, portions of interior brick walls over two meters high are exposed.
After removing old thin render from this panel height to the ceiling and removing Masonite five centimeters from both sides of the front room, cracks above the existing opening in the back wall and ground floor internal cross wall becomes evident.
160. Partners seek advice
The partners seek advice on making the four door openings safe in these two walls while also widening the kitchen entrance and changing the location of the cross wall center door opening in a way that would allow a separate door to the first floor stairs.
Two weeks after PJ's visit he supplies a detailed structural assessment with detailed drawings noting that the proposed door openings constitute structural changes which will not compromise the integrity of the building but Council BA must be sought and complied with first.
162. Not be advisable
In early June 2002, Mr Paul Bekker, who is Mr Pasqualle's structural engineer, visits and inspects the site and informs the Plaintiff that there are obvious, inherent structural problems and in his opinion it would not be advisable to open a shop/café/restaurant.
163. Second opinion
On receiving the structural report from PJ, the Plaintiff seeks a second opinion from Mr Bekker and Mr Pasqualle who advise inspection of the foundations under the ground floor which subsequently reveal tree root invasion.
164. Structural problems
On 19 July 2002, the partners show PJ tree roots found, after digging a 60 cm hole, at the junction of the cross and side walls in the large room plus other interior structural problems and a big crack at the junction of the common and back walls.
165. Cracks filled
After PJ advises the partners to fill the crack with concrete as per the front wall, mr Primost fills the crack by designing a feature to appear that two separate walls are connected by concrete belts.
166. PJ terminates further advice
After the Plaintiff seeks advice re the removal of the non-weight bearing first floor hallway wall as a non-structural change, Mr Johnston gives his reluctant permission but later sends the Plaintiff a letter terminating any further advice and a copy of a letter sent to Council Building Department.
167. The first Floor
The evidence of structural defects is such that the wooden floor's severe slope is at least 200 mm higher at the front than at the rear plus a severe slope of 130 mm from the Wall west to the common wall.
Loose joists offer insufficient support with some of the wooden joists that are supporting the floor loose in the wall because of insufficient filling material plus the wooden floor is not sufficiently strong enough to support heavy weights mainly because of the distance between the joists.
169. Back Wall - North, 5 m long, 8 m high and 3 openings
In regard to the back wall, there are several large cracks evident some about 4 cm wide, which are clearly, externally visible from both sides of the wall and which extend from both ends of the wooden lintel above the doorway.
170. Common Wall - West, 20 m long, 8 m high
At the junction of the south front and common walls there is found a disconnected gap of 5 cm with completely loose bricks which has created a clearly visible vertical crack from floor to ceiling being filled with concrete and rendered on the advice of PJ.
171. Vertical crack
At the building's rear is found a vertical crack at the junction of the north back and common walls separating the rear section from the main building which was also filled with concrete and rendered on Mr Johnston's advice.
172. Front Wall - South, 5 m long, 8 m high, 1 shop facade
The front wall is found to be unaligned with the adjoining property, 41 GPR, whose front wall leans outwards to the street and is tied with metal plates and bolts from the outside to bolster structural support.
173. Sidewall - East, 16 m long, 8 m high, 3 windows
This wall has extensive cracking of about 6 to 8 metres vertically from base to roof and from 3-50 mm in width but, due to filling and painting, are more visible from the interior while the biggest cracks are found around the fireplace especially beside ventilation ducts and adjoining cross wall.
174. Bend and bowing
A bend and bowing in the wall is found 4.5 metres from the building front which extends vertically directly to the roof while also extending horizontally outside and inside the building boundary line of the Wall.
175. Encroachment to the east
Around the bend and the bowing the wall encroaches on the boundary line of the building line to the east by at least 14 cm, and the lower left side of the fireplace has a 80 cm gap in the brickwork which the Plaintiff repairs as an emergency precaution.
176. Cutting for electrical wiring
The wall has a cutting of about 80 cm wide and 10 cm deep in the brick that was used for electrical wiring which extends horizontally along the Wall to the cross wall and which also rises vertically to the ceiling of the ground floor.
177. Lack of mortar
Mortar is missing in the interior walls while on the outside there is no filler to protect the mortar from water penetration, and the cross wall has two door openings with a loose metal lintel above one having missing bricks while the other opening having a wooden lintel.
178. Cross wall cracks
There are three large cracks 2 to 6 cm wide in the cross wall; one crack runs from the metal lintel to the east wall; another crack extends from the end of the wooden lintel to the ceiling but a third and largest crack in the cross wall extends from the base of the wall to the ceiling.
179. Roots penetrate sidewall
There is a double-trunked (40 cm diameter) five meter high tree growing directly adjacent, within 90 cm, to the Wall with its roots raising the ground around its base and which Council removes in early 2003 at the Plaintiff's request.
180. Roots penetrate foundations
With the roots of this tree penetrating the Wall's foundations the Plaintiff digs an interior trench adjacent and to the full depth of the footings which reveals a 38 cm root penetrating between and under the footing stones and a root off-shoot has penetrated the fireplace foundation.
On 1 August 2002, the Plaintiff submits a request to Council to see the building file and before leaving for Israel for a family reunion updates the Defendant on work site progress and leaves Mr Lesham to supervise his business affairs during his absence.
182. Evacuation
Following the adverse structural report that stated a danger of collapse, the Plaintiff deems the building unsafe and in August 2002 instructs Gilad, Matti and Mrs Sendler, another employee of MP, to vacate one of the two rooms they had occupied for the previous five to six weeks.
e 2. D.A submission
In September 2002, Gilad, on reviewing the building file, finds the 2000 Council Order and informs the Plaintiff, still in Israel, who then appreciates that the ramifications of the structural problems will involve a comprehensive D.A., instructs Gilad to tender for quotes from architects.
185. Pre D.A. meetings
The partners with the architect have pre-D.A. meetings with the Council Planning Department requesting, among other things, approval for replacing the Wall and after this the Plaintiff sends the plan and the statement of environmental impact to the Defendant to sign.
186. Rebuild on new footing
With the Defendant and Council requesting a second engineering opinion re proposed work under the D.A., the partners engage an acquaintance of Gilad who owns a smaller company than Mr Bekker.
187. Defendant insists on PJ
After noting strenuous objections from the Plaintiff that he had lost confidence in PJ's ability and competence, the Defendant insists on sending him to investigate and proceeds to dig two trenches adjacent to the Wall's foundation and a tree root found under the ground floor.
188. Severe structural problems
From January to April 2003, the Plaintiff engages in many long telephone discussions and arguments with the Defendant in attempts to convince him as to the severe structural problems and that Mr Vince, the Parks Manager, will confirm that Council has tree root damage insurance.
For a lease extension to twenty years and a few months free rent, the Plaintiff informs the Defendant that he would carry out the rectification work himself but is rebuffed the reason being that the Plaintiff's work so far is illegal making the Wall unaesthetic.
190. Council compensation
On comparing the Johnston and Bekker reports, the Defendant states that the Bekker report seems very superficial and wonders why the Plaintiff insists that there are structural problems and whether the whole exercise was to obtain financial compensation from Council.
191. Without approval
With the Plaintiff sending him images of the structural problems and also faxing Mr Bekker's report, the Defendant raises his concern with Council regarding the carrying out of work on his property without his or Council's approval.
192. Sydney City Council
Due to the redrawing of local government boundaries from 8 May 2003, the Sydney City Council ("SCC") is now the consenting authority for the Plaintiff's D.A. previously lodged Leichhardt Council.
193. D.A submission
e 3. I beg you
The Defendant rejects the Plaintiff's offer to resolve the dispute and after the stoppage of rental payment he changes the front door lock but leaves the back and rear door locks unchanged.
196. Wall is falling apart
The Council Planning Officer, Mr Greville, reports that the Wall is falling apart and a large tree that was recently removed severely damaged this Wall caused by its roots growing under and through foundation stones.
197. Withdrawal of consent
The Defendants inform the Plaintiff that their consent for the DA is withdrawn with the Defendant unsure as to why the Plaintiff wishes to continue with the application while, in the meantime, legal proceedings are proving to be expensive.
198. Proceedings are very expensive
On 17 July 2003, the Plaintiff receives a letter from solicitors Mackenzie Russell & Co, in response to his seeking legal advice, which emphasised that evidence of structural faults is relevant to the Defendant's deception as to the soundness of the structural state of the building.
199. Daylight shows through
PJ states that an unusual accident could bring down part of the Wall near the point of impact and seismic loading or heavy vehicular damage could cause a collapse of the whole wall.
On September ,2003 reports to the Plaintiff also referring to his October,2002 report, that to his dismay no repairs had been instigated on 39 GPR, the Wall is still in a precarious state,that the Wall is unsafe and needs immediate rectification, and collapse could occur at any time.
201. Plaintiff's tools confiscated
On 13 September 2003, with the Defendant ignoring the Plaintiff's request for the return of his work tools the Plaintiff approaches the Lawyer and in the letter of 16 September 2003, informs the Plaintiff that the request was made again but the Plaintiff's tools have not been returned to him.
In October 2003, the Plaintiff meets the Defendant and tries to show him the serious nature of the structural problems begging him to resolve the issue after which the Defendant rebuffs him telling him to get on with his life and that he will finis the Plaintiff.
F. Three Steel Frames
f 1. Emergency Order 2
203. Defendant to sue
During a second meeting the Plaintiff reiterates that he will not give up or disappear to which the Defendant replies that he will sue for damages re the destruction of his shop and that he will 'finish' the Plaintiff.
204. Defendant's D.A.
The Defendant informs Council that he is taking all necessary steps to perform work on the building and that any matter regarding public safety is being addressed and on 4 February 2004, he lodges a new DA which does not fully address the structural problems of the building.
205. The wall be repaired
Mr Bekker’s third report states that it is essential that the Wall be cordoned off; that cracking is permanent and irreversible and that condition of the Wall be addressed prior to finalization of the proposal as its condition is very precarious.
206. Requires substantial support
The Defendant attaches structural engineer reports from PJ. and Mr Greville’s internal memo states that the SCC's Structural Engineer concluded that the Wall does require substantial support/bracing prior to any further works commencing.
207. As wall has dropped
The Defendant's builder finds a 120 mm slope in the first floor and advises that as the Wall has dropped it would be worth stabilizing it by joining to the new floor slab to prevent future movement and he asks PJ for an idea of steelworks needed to join the old wall to a new slab.
208. First caveat
On 16 January 2004, the Plaintiff is granted a caveat on the property as he still believes in his dream plan and is afraid that the Defendant will erase him from the title and sell or rent the building to another party.
209. Plaintiff seeks date of lapse
In mid March 2003, the Plaintiff goes to the NSW Office of Land and Titles to discover the lapsing date and was told that it was 26 March 2004 and, after requesting a viewing of the document at the office, was told it was against departmental regulations.
210. Summons
On 25 March 2004, on lodging the summons to the Supreme Court the Plaintiff informs the Duty Judge that he had leased the property for three by five years with the Defendant knowing that the building was unsafe and was told by an officer of Land and Titles that lapsing was next day, 26th.
211. First caveat lapsed
During the hearing the Lawyer informs the court that he was told by the Office of Land and Titles that the caveat had lapsed and the Judge is under the impression that the Plaintiff had placed the caveat soon after he had signed the contract instead of two years with the Plaintiff not being granted new leave to apply for a new caveat on equal terms.
212. Existing footing has settled
The Defendant forwards to the SCC PJ's report in respect of the Wall and the SCC specialist structural engineer finds that the existing foundation footings below the Wall appear to have settled and thus recommends the bracing and shoring of the Wall.
213. Emergency Order: 2
There are two drafts of the Emergency Order the first being that the inspection report of the SCC structural engineer and town planner is the reason for the Order while the second draft states that temporary bracing must remain in place until a construction certificate is issued.
f 2. Apprehended Violence Order
On the day of issue of the second draft, PJ issues structural details that address the first two conditions with the final draft agreeing with the Bekker report that the Wall is structurally unstable and may collapse.
215. Police and fire brigade
On 8 April 2004, the Plaintiff with the front door locked but still legally entitled to enter the building, notices that rectification work might be being performed and while inside the building, the Plaintiff discovers two Defendant's tradesman, who call the police and the fire brigade.
On 15 April 2004, the Plaintiff is informed by police that he had legal access to the property until the afternoon when he is give an updated document from the Department of Lands stating that he was no longer on the Lease.
217. Surrendering the Lease
On 15 April 2004, Mrs Voukelatous as Joint Defendant legally surrenders the Lease at the NSW Department of Lands with an incomplete declaration and on the same day lodges a request to the Registrar General stipulating that the Plaintiff had indicated an intention of surrendering the Lease
218. Second caveat
On 5 October 2004, after presenting new facts and interests, the Registrar General grants the Plaintiff a new caveat who still wanted to execute his plans for 39 GPR after he had previously informed the Defendant via faxes that he felt deceived and wanted a resolution of the dispute.
On 11 November 2004, the Plaintiff faxes the Defendant notifying him of the new caveat while on 29 October and 3 November he again faxes him with the letter he sent to SCC after the first Emergency Order in 2000 and the BSB engineer's report of February 2000.
In sending the faxes, as he did not have his telephone number, the Plaintiff wants the Defendant to realize that he is aware of his foreknowledge of the structural problems and that agreeable dispute resolution would be the optimal result for both parties.
On 6 December 2004, the Defendant lawfully displays at 39 GPR the DA in order to comply with the SCC Order which the Plaintiff maintains is merely interior work which is not addressing the serious and fundamental structural problems of the building.
On 6 December 2004, the court Duty master and the Lawyer serve the Plaintiff the following documents: an outline of applicant's submissions; Defendant's chronology; the Defendant's affidavit plus copies on Interim Occupation Certificate and Retail Lease Disclosure Statement.
On 6 December 2004, the Acting Judge finds that, as the Registrar General of Land and Title had cancelled the Lease record, the caveat has lapsed which did not imply that the Plaintiff could not pursue his remedies at law, one of which was relief against forfeiture.
225. Apprehended Violence Order
On 10 December 2004, an Apprehended Violence Order is granted against the Plaintiff for harassment and verbal abuse by the Defendant which had resulted from the Plaintiff being notified by Glebe Police earlier on 23 November, 2004.
f 3. Three steel frames
226. Defendant complies
Knowing that the Plaintiff was going to keep seeking legal relief against forfeiture in the matter of 39 GPR, the Defendant begins to comply with safety issues outlined in the several requests of previous tenants and accelerates cosmetic renovations with a view to re-leasing the property.
227. Term 2 can be carried out
The structural details that are submitted to the SCC are in response to Term 1 of the Emergency Order and the Defendant is informed by Council that, as the work details specified in Term 1 of the Emergency Order are acceptable, Term 2 of the Order may be implemented.
228. Temporary bracing
With no alteration to the existing sandstone footing, all walls being on an equal footing and trenches being back-filled and firmly tamped, PJ, as 'structural engineer', issues a construction certificate and DA is approved to the Defendants with an order for temporary bracing the Wall.
229. Order Term 2
Cause of action 1
On 17 February 2005, the Registrar directs the Plaintiff to file and serve an amended summons by 3 march 2005 and that the Defendant is to file and serve a motion to dismiss by 10 march 2005 with the matter to be re-listed by 10 March 2005.
On 13 May 2005, structural engineer Mr Paul Bekker issues a report stating that there is no evidence that rebuilding or underpinning has occurred and that the Wall is in danger of collapse and recommends that it be cordoned off and rectified immediately for public safety concerns.
After presenting the Duty Master the interim occupation certificate and a signed Lease by a new tenant paying $1,000.00 per week, the Defendant claims he had done a lot of rectification work, lost a lot of money and wants to live on the first floor with his family.
Cause of action 2
With several non-compliance issues with fire safety unresolved, namely, exit signs, fire doors, fire retardant paint, smoke alarms, fire rated gyp rock and records of missed inspection, the Defendant is finally granted an Interim Certificate which is later re-issued due to a typing error.
With the Plaintiff not being granted relief against forfeiture, the Defendant is granted an interim occupation certificate, which after a typing error, has to be re-issued and after a site inspection Messrs Harding and Lim from SCC are satisfied.
During an onsite inspection by SCC officers, the Plaintiff provides Mr Bekker’s fourth report which recommends that a suitably qualified independent consultant engineer be engaged to check the building integrity and requests further information re the issuance of the recent certificate.
On 24 May 2005, the SCC's structural engineer, Mr Chahoud, recommends that the certification provided by Phillip Johnston be accepted as being satisfactory in complying with the three terms of the Order and therefore recommends its removal.
The Plaintiff is dismissed
256. Was not built in a straight line
On 28 April 2009, PJ attests in an affidavit that, as the Wall was not built in a straight line and with the lack of any separation or movement of the first floor joists, any evident bowing and rotation could not be used as evidence that the Wall is structurally unsound.