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Amir Bodenstein, an Israeli entrepreneur with experience in the building and food trades, worked as a manager in Pioneer Concrete Israel and Dovar Material Systems, a supplier to the building trade of special paint finishes and acoustic solutions.
In 1998 Bodenstein, with his business partner, Evos Primost, an artist with skills in design, materials, colours and paint finishes, identified business opportunities in Australia.
They established Morden Paint Sydney Australia (MPSA) there, which would apply paints to prestige projects and supply special paint finishes to the Australian building trade.
Bodenstein made exploratory business trips to Sydney. In 1998-2000 MPSA commenced operations in Australia and became known as a leading special paint company.
Bodenstein and Primost established MPSA in the Sydney suburb of Concord and in 2002 moved it to 136 Mitchell Street, Glebe.
Primost ran the operations of the company there while Bodenstein travelled back and forth between Sydney and Israel.
In 2001 MPSA won several Master Painters’ Association awards for excellence in its field.
In 2001 Bodenstein inspected a two storey Victorian terrace with a shop on the ground floor and a residence below. It was located at 39 Glebe Point Road, Glebe.
In his imagination he saw the property as a place where he could settle his family when they came out to Australia and where his wife could run a restaurant on the ground floor.
In 2001-02 Bodenstein negotiated with the property’s owner, Mr Voukelatos, for a lease and in January 2002 a “core lease agreement” was finalised between the parties.
Under that agreement the owner would pay the Council rates and Bodenstein would have the options of subleasing the premises and selling the business in it. Moreover, he would not need to provide a guarantor or any insurance other than that for public liability.
It was further agreed as follows:
- 3×5 years, $3,684.00 monthly
- Rent increases adjusted to CPI annually and up 8% every 5 years
- Reduced rent for six months
- Owner would given tenant $5,000 for roof replacement
- An insurance claim regarding vandalism could be handled by the tenant, who would be paid any rebate due
The owner mentioned that in 1989 he had asked Phillip Johnston, a civil engineer, to inspect and report on 39 Glebe Point Road with a view to checking the structural feasibility of making an opening in the side wall.
Johnston had reported that there were cracks in the wall, including a large crack in the south wall facing the park, and that there were two poplar trees in that park which may have contributed to some of the cracks.
In a second report in 2002 Johnston stated two trees had been removed, leaving a just a small one. The reported crack in the southern wall seemed to have lessened. Underpinning would not be necessary but the water penetration would have to be fixed and the third tree removed. The “bend” in the wall was an optical illusion. Internal walls did not need to be removed nor was the demolition of half of the building necessary.
Bodenstein paid three months’ rent and some of the lease preparation fees.
On moving in Bodenstein found the property had been vandalised, most likely during a previous vacant period. He also found the premises lacked insulation and that there was evidence of water penetration, dust and holes.
In March 2002 Bodenstein supervised the fixing of the drain and the cleaning of a grease trap.
For a period of six months, and simultaneously with general renovations to the property, Bodenstein worked on preparing the property for the launch of the restaurant and for occupation by his family.
He applied all of MPSA’s resources to that effort and was assisted by Primost and by Pasqualle, a builder and a client of MPSA.
In 2002 Primost showed some “dream plans” for 39 Glebe Point Road to the Council which, in return, informed him that the property had no heritage listing.
In the same year Bodenstein engaged Johnston to give him general advice about structural issues with the property.
- First floor, removal of walls: steel portal frame is to give lateral support to the east side wall – need for support to roof frame to be checked.
- East side wall: location of bend does not appear to be correct on drawing (bend is further back) – will need to reduce width of door opening.
- Internal cross wall, ground floor: existing openings may be widened into one opening main exist length of wall to remain intact, and substation brick head to remain over opening.
- Other small window and door opening: OK.
Bodenstein negotiated with the owner for the next eight months and finally received his copy of the registered lease.
Work proceeded on the preparation of the premises for the restaurant which, it was decided, would be called La Porte (the Gate). Photos were taken, equipment purchased and managers hired. In May 2002 a Moroccan dinner was served for friends and tradesmen who had worked on the project.
The owner Voukelatos and his lawyer urged Bodenstein to sign a Lease Contract that did not reflect the previous Core Lease Agreement and that had conditions that were relevant just to a shop in a shopping centre.
Bodenstein raised concerns about that and about the lengthy nature of the contract. The owner assured him those were all standard business practice.
Bodenstein also objected to various clauses in the proposed lease and claimed the owner was not sticking to their original verbal agreement and suggested that he was doing so for tax reasons.
The owner agreed that Bodenstein could have a free hand in his renovations of 39 Glebe Point Road, with the exception of any structural changes for which both owner consent and Council approvals would have to be obtained.
It had earlier been agreed that the proceeds of an insurance claim with GIO would pay for installing a few doors, replacing broken windows, repairing the stairs, installing new railing, carpeting three rooms, cleaning carpets, repairing walls, painting the interior and installing two new shop front windows. It had also been agreed that any GIO payout monies would be paid to Bodenstein.
When both parties agreed on the GIO’s offer of a payout of $4,100, the owner delayed several times sending the money to Bodenstein.
Bodenstein had agreed to pay half of the legal fees for the lease as well as the registration fees, stamp duty and disbursements. The owner’s lawyer asked Bodenstein for a cheque to cover those commitments.
The owner reminded Bodenstein he was still waiting for D.A./B.A. paperwork and for the rent.