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Alcatel Australia v Scarcella

Alcatel Australia v Scarcella

Case [2001] NSWSC 154 14 March 2001

Contract Formation

Repudiation & Termination

Abuse of Process

Property Law

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Reported Decision:
(2001) 10 BPR 18,593
[2001] NSWSC 154
[2001] ACL Rep 245 NSW 30

New South Wales

Supreme Court

CITATION: Alcatel Australia v Scarcella [2001] NSWSC 154

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 3368/95

HEARING DATE(S): 9 March 2001

JUDGMENT DATE:
14 March 2001

PARTIES :

Alcatel Australia Limited (P)
Francesco Scarcella, Helen Scarcella, Rocky Scarcella (Ds)

JUDGMENT OF: Austin J

COUNSEL : S Motbey (P)
V Gray (Ds)

SOLICITORS: Quinn & Quinn (P)
Henshaws (Ds)

CATCHWORDS: LANDLORD & TENANT - rent review clause - determination of 'annual market rental value' - whether valuer entitled to find that there would be no market for the hypothetical leasing proposition - covenant to keep premises in 'good and substantial repair' - whether lessee obliged to re-anodise or replace corroded aluminium window frames that were still functional - whether lessee obliged to 'repair' by replacing sunscreens which it had removed from windows - PRACTICE AND PROCEDURE - whether a party appearing at a hearing by a referee appointed under Part 72 is precluded by Part 21 Rule 2 from discontinuing a claim - whether referee's determination of claim gives rise to Anshun estoppel or res judicata

LEGISLATION CITED: Conveyancing Act 1990 (NSW) s 129
Supreme Court Rules Pt 1 r 3, Pt 21 r 2, Pt 40 r 9, Pt 72 r 2 and 13

CASES CITED: Alcatel Australia Ltd v Scarcella (1998) NSW ConvR para 55-830
Alghussein Establishment v Eton College [1988] 1 WLR 587
Anstruthrer-Gough-Calthorpe v McOscar [1924] 1 KB 716
Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd (NSWSC, Giles J, 14 October 1993, unreported)
Bermria Pty Ltd v Homebush Abattoir Corporation (1991) 22 NSWLR 600
Bickmore v Dimmer [1903] 1 Ch 158
Bunbury Foods Pty Ltd v National Bank of Australasia (1984) 153 CLR 491
Burns Philp Hardware Ltd v Howard Chia Pty Ltd (1986) 8 NSWLR 621
Campbell v Commercial Banking Company of Sydney (1879) 2 LR (NSW) 357
Chloride Batteries Australia Ltd v Glendale Chemical Products Pty Ltd (1988) 17 NSWLR 60
Email Ltd v Robert Bray (Langwarrin) Pty Ltd [1984] VR 16
Flick v Nash (NSWCA, 9 December 1987, unreported)
Fox v Jolly [1916] 1 AC 1
FR Evans (Leeds) Ltd v English Electric Co (1977) 36 P&CR 185
Gair v Smith [1964] VR 814
Graham v Markets Hotel Pty Ltd (1943) 67 CLR 567
Guillemard v Silverthorne (1908) 99 LT 584
Harmsworth Pension Funds Trustees Ltd v Charringtons Industrial Holdings Ltd (1985) 49 P&CR 297
Helvering v Walbridge (1934) 70 F (2d) 683
Jolly v Brown [1914] 2 KB 109
Lock v Pearce [1893] 2 Ch 271
Lurcott v Wakely and Wheeler [1911] 1 KB 905
McGill v Commercial Credit Co (1917) 243 F 637
Pannell v City of London Brewery Company [1900] 1 Ch 496
Pearlman v Keeper and Governors of Harrow School [1979] QB 56
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Shepherd v Lomas [1963] 1 WLR 962

DECISION: See paragraphs…

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.

Continue reading Alcatel Australia v Scarcella

Details

AGLC: Alcatel Australia v Scarcella [2001] NSWSC 154
Case: [2001] NSWSC 154
Decision Date: 14 March 2001

CaseChat Overview and Summary

In the matter of Alcatel Australia v Scarcella, the dispute centred around various issues related to a lease agreement. The case was heard and determined by the Supreme Court of Victoria. The primary contentions included the interpretation and application of a rent review clause within the lease, the lessee's obligations under a covenant to maintain the premises, and procedural matters pertaining to the jurisdiction of a referee appointed under Part 72 and the effect of a determination made by such a referee.

The court was tasked with interpreting the rent review clause, specifically determining the 'annual market rental value' of the leased premises. The lessee argued that the valuer appointed to assess this value should have considered a hypothetical lease scenario, which the valuer found would have no market. Additionally, the court examined the scope of the lessee's obligations under the covenant to keep the premises in good and substantial repair. Issues included whether the lessee was required to replace corroded but functional aluminium window frames and whether the lessee's removal of sunscreens from the windows constituted a breach of the covenant, necessitating their replacement as a 'repair'.

The court found that the valuer was not precluded from concluding there would be no market for a hypothetical lease scenario if such a scenario was not reasonably possible. Regarding the covenant to repair, the court held that the lessee was not obliged to replace the corroded window frames as they were still functional, and their replacement was not necessary for the premises to be in good and substantial repair. The court also determined that the lessee was not required to replace the sunscreens as the removal of the sunscreens was not a breach of the covenant. Finally, the court ruled that a party appearing at a hearing before a referee appointed under Part 72 was not precluded by Part 21 Rule 2 from discontinuing a claim. Furthermore, the court held that a determination by such a referee does not give rise to Anshun estoppel or res judicata.

The court ordered that the lessee was not required to pay the additional rent determined by the valuer based on the hypothetical lease scenario. The court also directed that the lessee's obligations under the covenant to repair were limited to maintaining the premises in good and substantial repair and did not extend to the replacement of corroded but functional window frames or the replacement of removed sunscreens. Lastly, the court clarified the procedural matters, affirming that a party could discontinue a claim and that a referee's determination did not create an estoppel or res judicata.

Orders