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Back to "Leasing and Property Newsletter - June 2017"


Christian v Paradyce Pty ltd [2017] VCAT 631

In this case, a hairdresser seeks damages from losses caused by the noisy exhaust system in the restaurant premises next door. The landlord does not own the premises next door, so is not liable under quiet enjoyment or under the Retail Leases Act (Vic) to prevent the nuisance.

This case was brought by the proprietor of a hairdressing salon in Port Melbourne, against her landlord, her former landlord and against the owners’ corporation for the building she occupied.

The Lease was subject to the Retail Leases Act (Vic). The term was 3 years with 3 further 3 year options to renew. The lessee exercised the first option to renew, which commenced on 1 June 2013.

The original landlord also owned the premises next door which, after the hairdresser commenced, was leased to a restaurant. The extraction fan system for the restaurant was located immediately behind the hairdressing salon, on the building’s common property owned by the owners’ corporation.

In mid-2015, the lessee’s son took up an active role in the hairdressing business. He soon began complaining about the noise from the extraction fan (among other issues). The salon withheld payment of rent to try to force the landlord to do something about the noisy extraction fan. Instead, the landlord took action to terminate the lease. This was resisted, but an injunction was not granted. The lease ended on 31 May 2016 without the lessee exercising its option. The lessee vacated the premises. Eventually, the matter came to be heard by the Tribunal.

The lessee’s claims were that the landlord was in breach of the lessee’s right to quiet enjoyment by not taking steps to abate the nuisance caused by the noisy extraction fan. The claim was for approximately $200,000, being part lost sales, part fitout costs and part costs to move the business to alternate premises.

The problem in the case for the lessee was evidence – they could not prove that the extraction fan caused a nuisance. They had audiometric tests and verbal evidence. The audiometric tests did not show that the extraction fan could be heard above the normal noise of a hairdressing salon. The court also did not consider the lessee’s witnesses to be credible.

Even though the case could not be won by the lessee because of the lack of evidence, the Tribunal considered what obligations the lessor had in relation to the noisy extraction fan. The landlord at the time did not own the premises next door (the original landlord still owned that premises). What duty does a landlord owe a tenant in relation to a neighbouring premises?

The Tribunal found that the obligation to provide quiet enjoyment does not extend to controlling neighbours unless the landlord authorised the neighbour’s actions. Under quiet enjoyment, a landlord is not under a duty to prevent a neighbour from creating a disturbance.

The Retail Leases Act (Vic) does impose an obligation for a landlord to “… take reasonable steps to prevent or stop significant disruption within the landlord’s control to the tenant’s trading at the premises” (section 54). In this case, the Tribunal found that there was nothing that the landlord could have done (remember, the landlord only owned the one premises – and not the premises next door or the common areas).

The tenant failed in their claim against all parties. However the case highlights two important points:

  • Quiet Enjoyment does not make a landlord is not responsible for nuisance caused by a neighbour, unless the landlord authorised the acts causing the nuisance; and
  • The Retail Leases Act (Vic) will only expand upon this if there were reasonable steps the landlord could have taken in response to the nuisance.

Obviously, in a shopping centre environment where the landlord owns all the premises and common areas, the landlord would be liable under quiet enjoyment and under the Retail Leases Act (Vic).

Matthew Rafferty, Partner

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