Commercial tenant ordered to pay $471k in unpaid rent and damages

After Svorosumo became the new lessee, its sole director and shareholder, Alyssa Svoronos, signed a guarantee of the business’s performance under the lease.

However, the business fell into arrears, and in February 2021, the lessors took possession of the shop from Svorosumo, before it went into liquidation in May.

The next year, Vicinity Custodian Pty Ltd and Ipoh Property Pty Ltd, both of which owned shares in the shopping centre, filed a statement of claim seeking payment from Svoronos.

According to court documents, the duo sought orders for the payment of unpaid rent totalling $326,060.16 and for damages for loss of rent in the sum of $210,181.

They also sought fitout contribution clawback costs of $45,499.55 and make-good costs of $704.00.

In her Further Amended Defence, Svoronos denied liability and filed a cross-claim, arguing the guarantee was not enforceable due to alleged unconscionable conduct, “equitable fraud”, and breaches of the Retail Leases Act.

Svorosumo claimed the guarantee was unconscionable as she’d had no choice but to sign it to keep the business operating, and that she had also signed it without legal representation.

However, the court found that there was no evidence of unconscionable conduct by the landlord, Ipoh Property, as such conduct would require serious wrongdoing, such as the exploitation of a weaker party.

The court held that Svorosumo was liable for the store’s debts under the terms of the guarantee.

Additionally, Svorosumo argued the landlord had acted in a way that led to business losses, which would offset any amount she owed.

She claimed they had enabled competitors to lease within the vicinity of her shop, installed pop-up stores that blocked the view of the premises, removed seating, and failed to control pests.

The court said there was no sufficient proof that the landlord’s actions had constituted “disturbance”, but even if there was, Svoronos had failed to prove it had caused a loss of sales.

Ultimately, the court ordered Svoronos to pay $471,916.47 to Vicinity Custodian and Ipoh Property, with further costs to be determined at a later date.

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