Anastopoulos v University of Sydney Union  NSWCATCD 6 – Decision 30 January 2017
In this case, the University decided that a sliding door was to be kept permanently closed. The door separated the lift foyer of the building from the café. The café could still be accessed, but the Lessee argued that the main access to the café, especially during peak periods was through that sliding door. The lessee claimed that permanently closing the sliding door was a breach of quiet enjoyment – they won; although there are some interesting twists and turns in the case.
The café lease (it was actually a licence, however in retail matters, lease and licence amount to the same thing) permitted the lessee to sell toasted sandwiches, toaster wraps, crepes and other café style foods. However, there was no exhaust in the premises, so the lessee was prohibited from cooking.
The DA limited the cooking equipment in the premises to a domestic gas oven, crepe maker and press toaster. Any other cooking equipment would be contrary to the DA.
The lessee installed a grill and range hood and was cooking meat and onions. This created an odour that wafted throughout the building foyer. That was why the university permanently closed the sliding door.
The Tribunal reviewed some other cases about quiet enjoyment. In a NSW Supreme Court Case Vasile v Perpetual Trustee WA Ltd the landlord planned works to a building foyer that involved removing a side entrance to a coffee shop. The Court found that would be a breach of the lessee’s quiet enjoyment. “Although the terms of the lease permitted the lessor to to enter and repair the premises and other parts of the building, the lessor was not entitled to materially change the nature of the lease or render it less effective”.
Courts have found that quiet enjoyment is the right of the tenant to operate their business without interruption by the landlord. Where the lease has been granted for the tenant to operate a particular business (which all retail leases are – see the permitted use) the tenant’s operation of that business is a right that the landlord may not significantly interfere with. Where the landlord’s interference involves significantly reducing the fitness of the premises for the businesses use (ie – by cutting off the main way customers access the premises), then the landlord will have breached the covenant for quiet enjoyment.
In this lease of the café at the university, the lessee was promised quiet enjoyment subject to the terms of the licence. The lessee had breached the terms by installing a grill and cooking meat and onions. The Tribunal found that permanently closing the sliding door was a breach of quiet enjoyment, but that because the lessee was in breach, it was not entitled to quiet enjoyment.
However – the lessee had removed the grill and ceased cooking meat and onions. It was no longer in breach, so it was again entitled to quiet enjoyment. The Tribunal made the following order: “The 2.9 metre sliding door is not to be permanently closed.”
Matthew Rafferty, Partner