Craig Bellgrove: Hobart realtor and his company found liable for breach of contract damages
A Hobart real estate agent and his company have been found liable for damages relating to a three-year tenancy agreement he signed but then stopped paying rent for just months into the lease.
Tasmania
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A Tasmanian real estate agent and his company are potentially on the hook for $100,000-plus after a Supreme Court judge found they were not entitled to any discount regarding a commercial tenancy dispute.
Jeetam Pty Ltd, a company owned by NSW duo Janice and Trevor Edwards, brought a damages claim against Craig Michael Bellgrove, the principal and director of More Real Estate Tasmania, and his company Myrtleforest Holdings Pty Ltd.
They sought unpaid rent, interest and legal costs relating to their property at 210 Liverpool St, Hobart, which Mr Bellgrove leased on April 15, 2019 for three years at an annual rent of $41,200.
However, Mr Bellgrove and his company stopped paying rent on August 1, 2019 and they exited the premises on January 14, 2020, in repudiation of their lease, Justice Robert Pearce said in a recent decision.
The premises were not relet until February 4, 2022.
Justice Pearce said it was uncontroversial that Mr Bellgrove and his company were liable for Jeetam Pty Ltd’s loss of bargain (i.e. the profit they would have made had the contract been executed according to its terms).
However, Mr Bellgrove and his company argued that the loss of bargain damages – $84,502.74 – claimed by Jeetam Pty Ltd should be reduced as the “plaintiffs did not do all they reasonably should have to find another tenant” after the repudiation, therefore failing to mitigate their losses.
The legal test in the matter is that the plaintiffs acted “unreasonably” in not mitigating their losses. Justice Pearce found this test had not been met.
According to the evidence of Mr Edwards, the month after the lease was repudiated, he instructed Knight Frank Tasmania agent Richard Steedman to “do everything possible to re-lease the premises”.
“At the time that the agents were looking for a new tenant for the premises [Mr Edwards] had various conversations with the agent and was told that there were ‘very few people looking around’,” Justice Pearce said.
“At some point he gave instructions to the agent to offer a ‘rent free period’ as an incentive to a prospective new tenant, but that still there was ‘no-one to negotiate with’.
“According to Mr Steedman, the leasing market in Hobart at that time was ‘very soft’.
“The unfortunate reality was that the attempts to relet the premises coincided with the commencement of the Covid-19 pandemic. It was very difficult to find commercial tenants.”
The advertised rent was knocked down several times before a new tenant was found in February last year, Justice Pearce said.
The plaintiffs also claimed $6,972.71 in interest – which Justice Pearce said should be allowed – and legal costs totalling $14,211.48.
Justice Pearce said he would hear further submissions as to the question of costs, as the plaintiffs’ costs were not clearly particularised and thus required further evidence, before making final orders.
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Originally published as Craig Bellgrove: Hobart realtor and his company found liable for breach of contract damages
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