Ad Astra Properties P/L v David\'s Ltd
[1998] VSC 59
•17 August 1998
SUPREME COURT OF VICTORIA
PRACTICE COURT
Not Restricted
No. 6739 of 1998
| AD ASTRA PROPERTIES PTY LTD | Plaintiffs |
| (ACN 005 173 857) AND OTHERS AS PER SCHEDULE | |
| v | |
| DAVID'S LIMITED (ACN 000 031 569) | Defendants |
| AND OTHERS AS PER SCHEDULE |
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| JUDGE: | Ashley, J. |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 12, 13 August 1998 |
| DATE OF JUDGMENT: | 17 August 1998 |
| MEDIA NEUTRAL CITATION: | [1998] VSC 59 |
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| CATCHWORDS: | Application for interlocutory injunction - Whether lease concluded - Whether breaches of lease - No serious issue to be tried - Damages an adequate remedy in any event - Other discretionary considerations opposed to grant of relief - Nuisance alleged - Serious issue to be tried - Injunction refused - Adequacy of damages and other discretionary considerations pertinent. |
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| APPEARANCES: | Counsel | Solicitors | |||
| For the Plaintiffs | MR G. BEAUMONT, Q.C. with |
| |||
| MR A. NOLAN | Wilson | ||||
| For the First Defendant | MR P.D. CORBETT | Hall & Wilcox | |||
| For the Second to | MR A. SOUTHALL, Q.C. with | Rogers & Gaylard | |||
| Fourth Defendants | MR P. RIORDAN |
HIS HONOUR:
The application
This is an application by the plaintiffs - Ad Astra Properties Pty Ltd, Beryljay Properties Pty Ltd, and Bradles Properties Pty Ltd - for interlocutory injunctive relief against the second, third and fourth defendants - Janagrom Nominees Pty Ltd, Peter James Morgan and Neal Morgan. An interim injunction was granted by Beach J, ex parte, on 4 August 1998. It was continued by his Honour's order of 10 August to 4.15 p.m. on 13 August 1998. On 13 August, whilst the hearing before me was continuing, I declined to extend its operation.
The 1976 lease and sublease
The plaintiffs own, individually, parcels of land which together make up a substantial area bounded by Bennett, Young and Main Streets, Bacchus Marsh. Bennett Street is to the north, Young Street to the east and Main Street to the south. The western boundary of the land abuts other properties.
As at December of 1976 a relatively small part of that land was owned by one of the plaintiffs - Ad Astra. Its only road frontage was onto Main Street. It was towards the west of the whole area now owned by the plaintiffs. As I understand it, no part of the land later acquired was purchased by Ad Astra.
On Ad Astra's land, as at December 1976, was a shopping centre including premises suitable for use as a supermarket. Ad Astra leased the supermarket premises to Composite Buyers Pty Ltd by lease dated 20 December 1976. The date of commencement of the lease was 8 September 1976. The term of the lease was 21 years. The lease provided that, with the lessor's consent in writing, the premises could be sublet. There was a covenant of quiet enjoyment:
Clause 4(b). At the time the shopping centre included "garden and carpark areas": Clause 4(a). There was a small parking area directly to the north of the supermarket and a somewhat larger area to its south. The larger area provided, it seems likely, parking for shoppers attending both the supermarket and other stores in the shopping centre.
The carpark areas, though referred to in the lease, were not themselves part of the leased premises. So far as I can see, the lease made no direct reference to the use that could be had by the lessee and its customers of such carpark area as then existed. The covenant of quiet enjoyment perhaps bore indirectly on the matter.
Finally, in respect of the 1976 lease I note that it contained a holding over provision: Clause 8. The tenancy was to continue in such an event as a monthly tenancy, determinable by one month's notice in writing from either party.
On 21 December 1976 Composite subleased the premises to Jack, Audrey, Peter and Roger Morgan. Peter Morgan is the third defendant in the present proceeding. The term of the sublease was 21 years less one day, commencing on 8 September 1976. The sublease contained a covenant of quiet enjoyment: Clause 4(b). So far as I can see, the sublease made no direct reference to availability and use of parking areas.
The area of the premises the subject of the head lease was extended by agreement between the parties to the original lease and sublease in December 1983. Nothing in the documents then prepared and signed were said by counsel to bear on the present problem.
Negotiations for a new lease
Months prior to September 1997 the parties to the lease and sublease engaged in negotiations with a view to concluding a fresh lease and sublease. In the description "the parties" I include David’s Ltd which, as I understand it, was effectively the owner of Composite Buyers Pty Ltd. In any event, according to the consultants engaged by what I shall call the Morgan interests, in May 1997 agreement was reached and heads of agreement were signed. But this agreement proved illusory, and on 5 September 1997 the lessor's agents wrote to Composite Buyers requiring possession as at 7 September 1997, but at the same time offering a monthly tenancy, terminable by either party on one month's notice, and generally upon the terms of the original lease (incorrectly described as having been dated 20 December 1975).
The agreement to lease
Occupation of the premises by the Morgan interests continued in fact beyond 7 December 1997. There was a meeting on 10 October of that year attended by representatives of the plaintiffs, David's and the Morgan interests. It appears to be common ground that the parties then reached agreement as to the principal terms of a new lease and sublease, the latter to be to “a Morgan's related entity”. The sublease was to be "on terms similar to the head lease". The common ground reached by the participants at the meeting was incorporated into an agreement to lease dated that day and signed by representatives of the plaintiffs, David's and the proposed sublessee. I note that:
(1)
"The lessor" was described as being the three plaintiffs; but the lessor - under the signature on p.2 - was described only as Ad Astra. The explanation for the discrepancy is obvious. Much of the document was typed, but the names of the second and third plaintiffs were elsewhere added in handwriting.
(2) "The premises", the subject of the agreement, were the "current
Morgan's supermarket premises".(3)
To the signature of the David's representative was subjoined the observation that it was "subject to David's approval". There is evidence from which it should clearly be inferred that such approval was subsequently given.
(4)
The sublessee was to be "a Morgan's related entity." For about ten years prior to September 1997 the management of the then sublessee's business had been carried on by the second defendant, although it had never, by assignment, become the sublessee.
(5)
It was evidently in the contemplation of all parties that the plaintiffs intended to expand the shopping centre in a substantial way. The agreement contained these relevant references:
∗ "no work will be done within the GLA of the
supermarket excepting entrance with the completion of
stage 2."
∗ "Carparking. Adequate carparking will be provided
(minimum 250) at all times (special circumstances
excepted)."
∗ "Disruption. Minimum disruption to be caused during
construction."
(6)
The agreement provided that "the current lease" was to continue until "the commencement date of the new lease." The commencement date was specified as 1 January 1998. What constituted the "current lease" was not described. Probably (although this is not the only possibility) it was an intended reference to the written lease dated 20 December 1976.
(7)
The agreement did not address itself to the existence and nature of any sublease in the period before the commencement date.
The May lease: the plaintiff's contention
No lease was executed before the commencement date. No lease has been executed to this day. No sublease, obviously enough, has been executed in all this period. The plaintiffs claim that the terms of a lease were agreed in May of 1998 (the May lease), and that they are entitled to rely upon those terms despite the document remaining unexecuted. Initially, in argument, senior counsel for the plaintiffs submitted that any contractual rights and obligations created by the May lease arose only between his clients and David's. Later he submitted that, arguably, the lease created both contractual rights and obligations between his clients and the Morgan entity.
Occupation in fact
It is a plain fact that, putting to one side the legal basis upon which it has occurred, the Morgan interests have remained in possession of the supermarket premises since September 1997. After January 1998, it appears, those interests paid rent for some period at the increased rate contemplated by the agreement signed on 10 October 1997. (Some of that rent was later returned by the plaintiffs in the course of the disputation that has persisted.) In any event, the payer, on one occasion identified by the material before me, was the second defendant. The evidence, such as it is, suggests that the second defendant is the Morgan entity which has been in possession of the supermarket during 1998.
Works and their effect on supermarket operations.
It is next plain that very major construction works have been undertaken on the plaintiffs' land during 1998, work commencing in January of this year. The material before me strongly suggests that such work has significantly impacted upon the ordinary operation of the supermarket, and that this apparent impact will continue for some months yet.
The nature of the impact has been this: The supermarket is situated on the western side of the land, roughly halfway between Main Street (to the south) and Bennett Street (to the north). Before construction works began, its doors opened to the east - they still do - onto a carpark of quite extensive dimensions. There was also a carpark to the south, and a carpark to the west and north. The carpark to the south was quite small (29 cars), and apparently serviced other shops in the centre also. The carpark to the west and north, providing in all 176 spaces, was, in part, directly behind the supermarket and, in part, varying distances to its west and north. The carparks to the east, the west and the north were all on land of which the second plaintiff was, and is, the registered proprietor.
The construction works involve, in essence, making use of the entire area of the plaintiffs' land. There is to be a two-level carpark running along the northern frontage (that is, along Bennett Street), its entry point being from Young Street a little south of Bennett Street. There is to be a large Coles Myer store, a somewhat smaller Fosseys store, more shops, and a central mall. The last of these will be situated to the east of the supermarket, occupying what was formerly some of the eastern carpark. The work which is to be done includes roofing over most of the area east of the supermarket (that is, including the mall); and laying a concrete floor right up to the eastern wall of the supermarket.
It was, I think, common ground that all the possibly relevant parties understood, before the work began, that:
(1) At some stage there would be a need to close off the eastern
carpark.(2)
A temporary carpark would be established immediately to the north of the supermarket - access being by an existing entry point from Bennett Street.
(3) A carpark would be established to the southwest of the
supermarket.(4)
During the construction work, after the eastern carpark had been closed off, access to the supermarket - that is, via the doors on its eastern side - would be given by a narrow walkway running along its eastern wall.
(5)
At some stage during the construction work it would be necessary to lay a concrete floor right up to the eastern wall of the supermarket, this necessitating closure of access to the supermarket's doors from the south at one time, and from the north at another.
(6) Temporary access to the supermarket from the south would be
facilitated by installing a door in its southern wall.
Of the two carparks which were to be created in lieu of the eastern carpark, the carpark to the north was to be both much larger and a good deal closer to the supermarket than the carpark to the southwest.
Although there appears to have been persistent disagreement between the plaintiffs and, relevantly, the Morgan interests about the timing and extent of particular works, work got under way in January of this year. In April the northern carpark was constructed and completed. In the same month a new goods door was installed at the northwest corner of the supermarket. The northern carpark was thus able to be the larger; but there was some diminution in available car spaces immediately to the west of (that is, behind) the supermarket. Also in late April 1998 the builder demolished the front of a shop backing onto the southern wall of the supermarket; this being preparatory to establishing the door referred to in para.6 above.
On 4 May 1998 the eastern carpark was closed off. Thereafter, access to the supermarket by shoppers was required to be by the walkway referred to in para.4 above.
In the period between late April 1998 and the present, the door referred to in para.(6) above has not been opened up. The Morgan interests have resisted this being done. The sticking point, as I understand it, is that installation of the door would necessitate re-organization of the supermarket liquor shop, this involving expenditure and an application to the Liquor Control Commission. Absent a finalized lease and sublease, the Morgan interests will not undertake this expenditure. Throughout, the landlord has remained willing to do the necessary construction work.
When the eastern carpark was closed off, cyclone fencing was erected around the entire construction site. It was the fencing which formed one side of the narrow walkway to the east of the supermarket, the eastern wall of the supermarket forming the other side. The fence extended north, along the eastern side of what I have called the northern carpark, up to Bennett Street.
Until July 1998, it seems, construction vehicles entered the construction site from Young Street – that is, from the east. But then such vehicles began to enter the site through a gate which was constructed in the fence running along the eastern side of the northern carpark. In consequence, a number of car spaces in that carpark were rendered unusable. Moreover, the flow of construction vehicles, to judge from a videotape which I viewed, became very considerable. The type of vehicles shown entering and exiting the site through a second gate later constructed in the particular fence included a semi-trailer (apparently hauling a long load of steel), a mobile crane, a truck and dog trailer, a tractor, concrete mixtures, and a variety of non-articulated trucks. These movements took place over a relatively short period. The method of entry of those vehicles in some instances substantially blocked off ingress and egress to the northern carpark. It was not suggested for the plaintiffs that the videotape depicted an unusually high level of activity. The site manager has deposed that the passage of the vehicles causes "minimal interference" to the northern carpark. That assessment is, in my opinion, very wide of the mark.
The plaintiffs say that now the only possible entry point for construction vehicles is, via the Bennett Street entrance, through a gate in the fence to the east of the northern carpark. Indeed, they say that the gate depicted in the videotape, which is not far south of Bennett Street, will not be able to be used for much longer. It was only installed, they say, because the Morgan interests entered upon obstructive conduct when use was made of a gate further to the south in that fence. The gate further to the south will be required shortly. Use of that gate, in my opinion, will further impair such use as can now be made of the northern carpark, for the site manager has deposed that within the next few weeks substantial deliveries of structural steel requiring movement by semi-trailers will be made; also concrete slabs providing 3,000 square metres of floor and roofing for most of the site. The site manager is concerned that delays may cause him not to meet his performance deadline.
Before passing from this aspect of the matter, I note that there was no gate in the fence bordering the northern carpark until about three weeks before 6 August 1998 (para.15 of the affidavit of Peter Cross, the site manager, sworn 6 August). No gate was shown in a stage 2 construction plan dated 12 January which was handed up to me by senior counsel for the plaintiffs during the hearing. Whenever it was that a decision was made to open up this access point, one thing seems to me to be clear - that it has caused, and will cause, considerable interference to the operation of the supermarket - the more so at such time as southern access is closed off for a three day period.
The response of the Morgan interests
The Morgan interests, evidently considering that there was a level of disruption to their business which much exceeded whatever was authorized by any agreement they had with the plaintiffs (or any of the plaintiffs), took matters into their own hands in very late July and early August 1998. On 30 July Mr Neal Morgan parked his car across the southern gateway in the fence along the eastern side of the northern carpark. The next day the store manager did the same thing; and Mr Peter Morgan parked his car in a position to obstruct site traffic. The same day Mr Neal Morgan parked his car opposite the new gateway which had been established further to the north in that fence. He impeded ingress of a forklift. Similar conduct was engaged in on 2 and 4 August. On the latter day Messrs Neal and Peter Morgan, and the store manager, stood in front of construction vehicles. These activities apart, on 29 July the Morgan interests removed, or had removed, signs erected by the builder advising shoppers that access to the supermarket from the south would be closed for three days to allow for necessary construction work.
It was the conduct thus described which led Beach J to grant the interim injunction, an injunction expressed in very broad terms that senior counsel for the plaintiffs ultimately did not seek should be replicated by me.
The statement of claim
The central allegations made by the statement of claim are that:
1. Janagrom, the second defendant, a company the directors of which include Messrs Peter and Neal Morgan, and which is said to be wholly owned and controlled by the four sublessees under the 1976 sublease together with Mr Neal Morgan, has at material times operated the supermarkets. [Paras.5-7]
2. The plaintiffs entered into an agreement to lease in or about October 1997. The parties with whom it made the agreement are, in an indirect way, alleged to be David's and Janagrom. [Para.3]
3. The agreement to lease contained, inter alia, the following terms:
(a) that the Plaintiffs would carry out an expansion to the Shopping Centre;
(b) that the Plaintiffs and the Defendants would execute a lease in writing of the supermarket for a period of 5 years commencing 1 January 1998;
(c) that the first Defendant would sub-let the premises to the second Defendant for a period of 5 years commencing 1 January 1998;
(d) that the second Defendant would continue to operate the supermarket at the shopping centre during and after the expansion;
(e) that the Plaintiffs and the Defendants would execute legal documents including a valid and enforceable lease to the first Defendant and a valid and enforceable sub-lease to the second Defendant. [Para.9]
4. The agreement to lease has been part performed; the plaintiffs have commenced to carry out renovation work and have prepared a lease while the second defendant has continued to operate the supermarket. [Para.10]
5. The plaintiffs agreed to the terms of a lease with David's in May 1998. The lease is binding on David's, it neither having returned an executed copy or denied that the lease contains the agreed terms. [Para.12]
6. The terms of the lease are, inter alia: Clause 23(1):
"The tenant hereby expressly acknowledges the landlord's proposal for major alterations and improvements and subsequent subdivision of the Centre (whether in one stage or multiple stages) including the premises broadly in accordance with the planning permit and plans annexed hereto at Schedule 2 and accordingly the tenant acknowledges that in the event the major alterations and improvements and/or subdivisions of the Centre require the landlord to carry out or cause to be carried out any major alterations and improvements to the Centre or the premises the landlord shall take reasonable steps to cause no undue inconvenience to the tenant's business and no substantial adverse effect on the tenant's business."
Clause 23(2)
"The landlord and the tenant agree that the course of action and timetable set out in Schedule 9 concerning those parts of the major alterations and improvements referred there are acceptable to each of them."
Clause 23(5)
"The tenant shall not cause or attempt to cause or procure thecausation of any disruption, delay or strike to any major alterations and improvements of the Centre and/or the land and/or any redevelopment by any associated person of the landlord of the land adjacent or in close proximity to the Centre."
Clause 12(1):
"The tenant may only transfer this lease in accordance with clause 12(2) but may not sub-let or licence or otherwise part with possession of the premises. The landlord consents to a sub-lease of the premises to Peter James Morgan, Neal Andrew Morgan, Audrey Margaret Morgan, Roger John Morgan and Jack Morgan or a wholly owned and controlled company of theirs (the Morgan entity) provided that the Morgan entity agrees with the landlord and the tenant to comply with the terms and conditions imposed upon the tenant pursuant to the lease." [Para.13]
(7) The Morgan interests nominated Janagrom to be the sublessee either pursuant to the terms of the agreement to lease or the lease. That company was to be responsible for performing all the covenants in the head lease. [Para.14] 8. Janagrom has agreed to comply with the terms and conditions under the lease, including the obligation imposed by clause 23.5. [Para.15] 9. In breach of the terms of the lease - (a) the second Defendant has attempted to delay the alterations and renovations to the Shopping Centre;
(b) the second Defendant has attempted to restrict access to the building site at the Shopping Centre to delay the construction of the Centre;
(c) the second Defendant has attempted to prevent the Plaintiffs' contractors from completing the redevelopment of the Centre;
(d) the second Defendant has removed signs advising the public of
the temporary closure of access from the south to the
supermarket for a period of three days to enable the Plaintiffs'
contractors to carry out building works to the area
immediately south-east of the supermarket. [Para.17]Further, Janagrom has refused to permit installation of the doorway in the southern wall of the supermarket contrary to the works programme set out in Schedule 9 of the lease. [Para.18]
10. The second, third and forth defendants have obstructed access to the construction site, that constituting a nuisance. [Paras.21-23]
The relief sought by the statement of the claim includes the following:
B. An interim, interlocutory and permanent injunction to restrain the second, third and fourth Defendants from causing or attempting to cause or procure the causation of any disruption, delay or strike to any alterations or improvements or the redevelopment associated with the premises located at the Bacchus Marsh Village Shopping Centre.
C. An interim, interlocutory and permanent injunction restraining the second, third and fourth Defendants from locking {sic}, impeding or obstructing access to the construction site at the Bacchus Marsh Village Shopping Centre.
D. An interim, interlocutory and permanent injunction restraining the second, third and fourth Defendants from parking any trucks or vehicles in such a manner as to block the entrance to the construction site at the Bacchus Marsh Village Shopping Centre.
It is necessary to the claim raised by paras.8-18 that the May lease has effect as between the plaintiffs and David's. That is made clear by paras.12, 13, 17 and 18. The plaintiffs' claim is not founded upon the agreement to lease. Para.14 does not tell to the contrary. Its purpose is to identify the second defendant as the sublessee bound to perform the lessee's covenants.
If it be assumed, in the plaintiffs' favour, that clause 12.1 of the May lease could give the plaintiffs a right of action founded in contract against a sublessee, the plaintiffs must show, upon this aspect of their pleaded case, that there is a serious issue for trial that the terms of the lease were agreed and that the lease became effective between the plaintiffs and David's. In the circumstances which I shall now describe I do not accept the plaintiffs have made this out.
It is clear that various drafts of a lease were prepared in the period December 1997 to May 1998. Because, in a practical way, any lease would impact upon the Morgan interests, particularly with respect to the nature and scheduling of the new building work, the drafts were seen and commented upon by the Morgan interests, their property adviser and their solicitors. Dissatisfaction was constantly expressed by the Morgan camp - which repeatedly called on the plaintiffs' side to prepare a document in accordance with the October 1997 agreement to lease. Emphasis was laid on the minimum disruption provision in that agreement. The solicitor acting for the plaintiffs from time to time denied that there had been any such agreement. They asserted that continuing occupation of the supermarket was pursuant to the overholding provision in the 1976 lease.
Ultimately, the plaintiffs' solicitors sent the May lease to both David's and the solicitors for the second defendant. It included Schedule 9, which sets out certain details of the works to be undertaken, and their timing. The second defendant's adviser communicated his client's dissatisfaction with the content of Schedules 8 and 9. That was the subject of further debate. Clear it is that the plaintiffs' side did not agree to all the changes proposed by the second defendant. Nonetheless, the plaintiffs contended by fax dated 25 May 1998 that an enforceable lease agreement now existed, being the May lease as amended by comments faxed to the second defendant's adviser on 21 May (which comments in part reject the amendments proposed by the second defendant).
The plaintiffs say that the question is not whether the second defendant agreed to the terms of the lease, it is whether David's did so. No doubt that is correct, but it seems highly improbable that David's would have agreed to a lease containing a work schedule which its proposed sublessee considered to be disadvantageous and at odds with the agreement to lease of October 1997. When the plaintiffs' solicitors wrote to David's solicitors by letter of 12 June 1998 asserting that a lease was in operation on the same basis as had been alleged in the letter dated 25 May written to the second defendant’s adviser, Davids' solicitors replied, in substance, that this was not so. That denial has been repeated as recently as 4 August 1998. I add that David's counsel told me from the Bar table, and his assertion was not controverted, that his instructions were that his client had never seen a copy of Schedules 8 and 9 in what the plaintiffs claim are their agreed form.
If the plaintiffs had satisfied me that there was a serious issue to be tried upon the allegations raised in paras.8-18, I would not in any event have granted the plaintiffs the relief that they seek. In the first place, if obstructive behaviour were to take place again - and I make it clear that I am not condoning such behaviour, whatever indignation the Morgan interests may feel - I am far from satisfied that the plaintiffs could not be adequately compensated by damages. I do not accept that the monetary consequences of works being held up for short periods could not be reliably determined. Further, I am not persuaded that the plaintiffs would have any greater difficulty in establishing the quantum of damages resulting from assumed unlawful activity by the Morgan interests than the latter would have in establishing the quantum of damage resulting from assumed unlawful activity by the plaintiffs.
Second, the main areas of dispute between the plaintiffs and the second defendant have centred on closure of the southern access to the supermarket and disruption of the northern carpark. During the hearing before me the second to fourth defendants, through their senior counsel, undertook not to obstruct closure of that access for a three day period, so that the builder could carry out necessary works. That leaves only the northern carpark problem as a source of continuing conflict. Concerning that problem, I consider that the merits are very much in favour of the second to fourth defendants.
Senior counsel for the plaintiffs conceded that, arguably, if his clients could have the benefit of the covenants in the lease against the sublessee, so could the sublessee have the benefit of covenants available to the advantage of the lessee. The plaintiffs call in aid , particularly, clauses 23.1, 23.2, 23.3, and 23.5 of the May lease. The second to fourth defendants rely also on clause 23.1, as well as Schedule 9 and clause 13.1.
The material before me strongly suggests that interference to the operations of the supermarket resulting from the impairment of parking facilities in the northern carpark has been and will continue to be very significant. There is evidence that, over the period since April 1998, the turnover of the business has much declined. That implies reduction in profitability. Mr Roger Morgan has deposed that this is a consequence of interference with the operations of the supermarket by the developing works. The plaintiffs have suggested that there is an alternative reason, but the cause and effect relationship deposed to by Mr Morgan seems credible. It appears to me that such effect would very likely be exacerbated by impairment of parking facilities in the northern carpark, a park set up to make good the loss of the eastern carpark.
But, say the plaintiffs, they have taken all reasonable steps to cause no undue interference to the supermarket. In my opinion, the evidence suggests to the contrary. The second and fourth defendants have adduced evidence that other entry points are available to the site. Not so, say the plaintiffs. I can agree that some vehicles might not be able to use the other entry points - vehicles with very long or very high loads. But otherwise I do not accept the plaintiffs' evidence on the matter. In my opinion, the extent of interference with the use by shoppers of the northern carpark could, and should, consistently with the lease (assuming its operation), be very greatly reduced. I note also that the need to open up an entry to the building site via the northern carpark finds no mention in Schedule 9. This absolute necessity, as the plaintiffs now put it, appears for a very long time to have gone unrecognized.
The obstructive conduct by the third and fourth defendants and, by implication, the second defendant should be seen in the circumstances as a response to conduct of the plaintiffs in breach of the agreement upon which the plaintiffs rely. That is not to encourage obstructive conduct by the second and fourth defendants - conduct which, if the May lease in fact governs the relationship between the parties, may very well be in breach of the terms of that lease. But it is to say, on a balancing of considerations, that the circumstances I have described would not call for an exercise of discretion in favour of the plaintiffs.
Third, on 3 August 1998 Composite Buyers gave notice of termination of the lease (assuming that there is an overholding under the 1976 lease); and on the same day it gave the sublessee under the 1976 sublease notice of termination of that sublease. The lease and sublease will, if the basis of continuing occupation is an overholding under the 1976 lease, terminate on 4 September 1998. On 31 July 1998, I add, the solicitors for Janagrom gave notice to both Composite Buyers and David's of intention to terminate "the monthly tenancy". I say nothing as to why Janagrom should be giving such notice or as to why one such notice should have been given to David's. In any event, the plaintiffs' solicitors, by letter to Composite Buyers and David's dated 13 August 1998, in substance accepted that, as a fact, occupation of the supermarket is to be given up by 4 September. Those letters spoke of having "commenced negotiations to relet the premises".
I should not assume, although I am tempted to do so, that all this is just more posturing, of which the materials before me show there has been a good deal. Senior counsel for the plaintiffs submitted that, on the assumption that the occupation has only a few weeks to run, his clients' claim for relief was the stronger. I consider, however, that in circumstances where I otherwise consider the exercise of discretion would lie in favour of refusal of relief, the prospect that continued occupation will be shortlived works in favour of the defendants.
I turn to the claim founded in nuisance. Senior counsel for the plaintiffs relied, by analogy, on Walsh v. Ervin (1952) V.R. 361 at 362-364 to show that restriction upon access to the plaintiff's land was or could be a nuisance. He sought to equate a right to move from one parcel of private land to another parcel of private land (both parcels being in the one ownership) to a right of access between a public highway and private land. The evidence showing that the land to which access was obstructed is owned by the second plaintiff, he sought relief only in favour of that company against the second to fourth defendants.
I will assume (the matter was not much argued for the second and fourth defendants) that the second plaintiff can show a serious question of trial upon the plea of nuisance. That requires consideration of discretionary factors. In my opinion those factors tell against grant of relief. First, if the May lease governs the relationship between the parties, the discretionary considerations to which I referred in that connection are, in my opinion, relevant. What I said in connection with the other plea about a remedy in damages applies equally. It is not suggested by the statement of claim that the alleged loss and damage is different in type from that claimed in reliance upon the May lease. Second, if the correct analysis is that occupation has continued since October 1997 under terms of the agreement to lease, I consider that the plaintiffs would be in no better position than if the May lease governed relations between the parties. It is arguable that the second defendant could rely upon the terms of that agreement. It is strongly arguable, on the material before me, that the plaintiffs have not caused minimum disruption during construction. In that event, all of the discretionary considerations to which I referred in connection with the May lease would apply. If, however, the correct analysis is that there has been an overholding since September 1997, the second plaintiff (though not a party to the 1976 lease) would be better placed as regards the second and third discretionary considerations to which I earlier referred. Even so, I would not in all the circumstances which I have described exercise my discretion in favour of the second plaintiff.
Conclusion
| 45 | The plaintiffs should be refused the interlocutory relief that they seek. The second and fourth defendants not pursuing a cross-summons for interlocutory relief filed on their behalf on 10 August 1998, that summons should be dismissed. (Discussion ensued) |
In my opinion, on the application made by the plaintiffs by summons filed 6 August the orders that ought to be made are: summons dismissed with costs including reserved costs. On the summons filed for the second to fourth defendants on 10 August the orders should be: summons dismissed with costs including reserved costs.
The plaintiffs' summons has substantially failed. What has been salvaged out of it is the undertaking given by the second to fourth defendants concerning the southern access. I do not regard that as being unimportant. If there had only been the plaintiffs' summons before me it might have been a basis for reducing a costs order in favour of the second to fourth defendants. But having regard to the fact that there is a defendants' summons - which wasn't much argued but which, having been dismissed formally, can be dismissed with costs - I think that orders dismissing both summonses with costs strikes the right balance between the respective successes and failures of the parties.
The costs order on the plaintiffs’ summons ought to extend to the defendant David’s. It is true that no relief was sought against that defendant by the application. Nor is relief sought in the writ. On the other hand, having regard to the relationship between the plaintiffs, David’s and the Morgan camp, it seems to me that David’s interests were very much involved at an interlocutory level in the disposition of the plaintiffs' summons. Whilst David’s did not go on affidavit I was certainly assisted by Mr Corbett's submissions. As I have said, his client was in a position where, in my opinion, it needed to be represented in order to ensure that its position was protected.
(Further discussion ensued.)
I can imagine that, if the parties' level of antagonism remains as it has been in the period of the hearing before me, there is likely to be a taxation rather than an agreement as to costs. I note that the taxing master under the rules does have power to "refer to a judge for direction any question arising on a taxation" (see Rule 63.51). It may well be that the parties will dispute the amount to be allowed on costs, particularly on the unsuccessful summons brought by the second to fourth defendants. If the Taxing Master were to seek my assistance upon the matter, I would give it to the extent that I am able - as to the time spent in court dealing with particular issues. Whether the Taxing Master, if he sought and was given that assistance, would communicate it to the parties is another matter. At the moment I shall do no more than say that I am ready to give such assistance if it is sought.
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