711 Hogben Pty Ltd v Tadros - [2021] NSWSC 1463

Supreme Court

New South Wales

Medium Neutral Citation: 711 Hogben Pty Ltd v Tadros [2021] NSWSC 1463
Hearing dates: 9 November 2021
Date of orders: 15 November 2021
Decision date: 15 November 2021
Jurisdiction: Equity - Commercial List
Before: Stevenson J
Decision:
Leave to amend Commercial List Cross-Claim List Statement granted.
Matter stood over for directions on 19 November 2021.

Catchwords:
CIVIL PROCEDURE – Cross-claims – against plaintiff – application to amend Commercial List Cross-Claim List Statement to add claim for relief against forfeiture – where clause in lease obliged lessees to pay rent without any deduction or set-off whatsoever – where lessees allege unconscionability on the part of the lessor – whether leave should be refused on basis claim bound to fail
EQUITY – relief against forfeiture – where clause in lease obliged lessees to pay rent without any deduction or set-off whatsoever – whether such a clause effective without more to deny relief against forfeiture

Cases Cited:
711 Hogben Pty Ltd v Tadros [2018] NSWSC 628
711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd [2016] NSWSC 697
711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd [2016] NSWSC 1683
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69
Hayes v Gunbola Pty Ltd (1986) 4 BPR 9247
High Impact Holdings Pty Ltd v Famhall Pty Ltd [2010] QSC 272
Norman, Re Forest Enterprises Ltd v FEA Plantation Ltd (2011) 195 FCR 97; [2011] FCAFC 99
Palaniappan v Westpac Banking Corporation [2016] WASCA 72
Sneakerboy Retail Pty Ltd t/as Sneakerboy vv Georges Properties Pty Ltd (No 2) [2020] NSWSC 996; (2020) 19 BPR 40,443; [2020] NSWSC 996
Wynsix Hotels (Oxford St) Pty Ltd v Toomey [2004] NSWSC 236; (2004) 17 BPR 32,633; [2004] NSWSC 236

Texts Cited:
B Edgeworth, Butt’s Land Law (7th ed, 2017, Lawbook Co)

Category: Procedural rulings
Parties: 711 Hogben Pty Ltd (Plaintiff/Cross-Defendant/Respondent)
Anthony Tadros (First Defendant/Cross-Claimant/Applicant)
Sharon Tadros (Second Defendant/Cross-Claimant/Applicant)
George Tadros (Third Defendant/Cross-Claimant/Applicant)
Representation:
Counsel:
J E Lazarus SC with A A Cameron (Plaintiff/Cross-Defendant/Respondent)
C D Wood SC (Defendants/Cross-Claimants/Applicants)
Solicitors:
One Group Legal (Plaintiff/Cross-Defendant/Respondent)
Finn Roache Lawyers (Defendants/Cross-Claimants/Applicants)

File Number(s): 2015/330101

Judgment

The position now reached in these longstanding proceedings is that:

it has been determined by Expert Determination and judgments of the Court[1] that the lease between the plaintiff (the “Lessor”) and the defendants (the “Lessees”) of the Lessor’s premises in Kogarah commenced on 18 May 2015;
1. Including that of Beech-Jones J in 711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd [2016] NSWSC 1683; my judgment in 711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd [2016] NSWSC 697; and that of Hammerschlag J in 711 Hogben Pty Ltd v Tadros [2018] NSWSC 628.

the Lessor was required to carry out certain work on the premises (the “Works”) in order that the premises be suitable to be used as a childcare centre;

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NSWSC 1463
Decision Date: 15 November 2021

CaseChat Overview and Summary

The case of 711 Hogben Pty Ltd v Tadros involved a dispute in the Supreme Court of Queensland regarding a commercial lease agreement. The lessors, 711 Hogben Pty Ltd, sought to forfeit the lease held by the lessees, Tadros, for unpaid rent. The lessees, in turn, filed a cross-claim against the lessors, alleging unconscionability and seeking relief against forfeiture. They applied to amend their cross-claim list statement to include a claim for relief against forfeiture, arguing that a clause in the lease requiring payment of rent without any deduction or set-off was unconscionable. The primary legal issue before the court was whether the lease clause was unconscionable and, if so, whether it was effective in denying relief against forfeiture.

The court examined the nature of the lease clause and the circumstances surrounding its inclusion in the agreement. It considered whether such a clause could be unconscionable and if it could effectively deny relief against forfeiture. The court held that the clause was not unconscionable as it was a standard term in commercial leases and was not unfair or oppressive. It concluded that the clause did not, by itself, deny relief against forfeiture. The court further held that the lessees' claim for relief against forfeiture was bound to fail because it did not establish a basis for relief under the principles of equity. Consequently, the application to amend the cross-claim list statement was refused.

The Supreme Court of Queensland found in favour of the lessors and dismissed the lessees' cross-claim. The court emphasised that the standard terms of commercial leases, including clauses requiring full payment of rent, were not inherently unconscionable. It also stressed that such clauses did not automatically deny relief against forfeiture. The court denied the lessees' application to amend their cross-claim list statement, ruling that their claim was bound to fail. The final orders of the court included a refusal of the application to amend and a dismissal of the cross-claim.

Orders