All North Shore Towing v Babbage

[2018] NSWSC 1620

Supreme Court

New South Wales

Medium Neutral Citation:	All North Shore Towing v Babbage [2018] NSWSC 1620
Hearing dates:	24 October 2018
Date of orders:	24 October 2018
Decision date:	24 October 2018
Jurisdiction:	Equity
Before:	McDougall J
Decision:	Grant interlocutory injunctive relief on conditions.
Catchwords:	EQUITY – application for interlocutory injunctive relief – plaintiff alleges that defendant is obstructing access to the premises which it has leased – where defendant has a number of answers to that allegation – whether there is a serious question to be tried – consideration of balance of convenience – application granted – no issue of principle.
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW)
Category:	Procedural and other rulings
Parties:	All North Shore Pty Ltd (Plaintiff) Babbage Pty Ltd (Defendant)
Representation:	Counsel: M Bennett (Plaintiff) G O’Shea (Defendant)   Solicitors: Mitry Lawyers (Plaintiff) P J Ellis Solicitors (Defendant)
File Number(s):	2018/323127

Judgment

1. By lease commencing on 1 January 2018, the defendant agreed to lease to the plaintiff, for a period of three years terminating on 31 December 2020, the "Premises" described in clause 1.1 of the lease as follows:

Premises means the part of the Land and the Building highlighted in yellow on the plan annexed to this lease as Annexure C comprising of Parking (Underneath) and adjacent courtyard, excluding any common parts of the roof walls, guttering, plumbing and foundations but including all internal surfaces. It expressly excludes the adjoining workshop including those rooms underneath the Premises which are accessible from the workshop. It also includes the Landlord’s Fitout and any structural modifications made to the Building by the Tenant.

2. The plan annexed to the lease and marked "C" is spectacularly unclear. Neither of the two copies in evidence contains any yellow highlighting. The evidence of the defendant's solicitor is that he holds an original copy of the lease and that there is no yellow highlighting on Annexure C to that document.

3. The plaintiff came to court on 22 October 2018 because, on the plaintiff's case, the defendant was first of all obstructing access to part of the premises and, secondly, itself using part of the premises. I was satisfied that there was a serious question to be tried, and that the balance of convenience favoured the granting of ex parte interlocutory relief. Accordingly, I did so.

4. The matter came back before the court today. The defendant's case is, first of all, that the lease is void for uncertainty, because the annexure, by reference to which the premises are defined, is not highlighted in yellow and accordingly it is not possible to determine, from that annexure, what is the area of land that is the subject of the lease. That part of the defendant's case is substantiated by the evidence to which I have referred.

5. There appear to be at least two possible answers to that defence. The first is that the description, although it includes a reference to Annexure C, also describes what is and what is not part of the Premises that are the subject of the lease. It may well be possible, by inspecting the property, to give content to that definition so as, in turn, to give certainty to the description of the Premises.

6. The other possible answer is that the lease could be rectified so as to coincide with the common intention of the parties at the time they made it of what it was that was to be the subject of the lease. I understand from Mr O'Shea of Counsel, who appeared for the defendant today, that there may be some dispute as to precisely what was agreed. None of that means that there is not a serious question to be tried. On the contrary, it confirms that there is.

7. The next answer that the defendant makes is its assertion that the plaintiff agreed that the defendant have the use of part of what, on the face of the lease, appears to comprise the Premises. For example, those Premises include a hoist which apparently is used for the purpose of the defendant's mechanics business conducted from other parts of the overall property. I agree with Mr O'Shea that it would be surprising if the defendant, by the lease, gave away its right to use that equipment. Mr O'Shea submitted that there was other equipment in the same category. That may be so; but at present there is no evidence of that.

8. The plaintiff's response to this submission is that it is prepared to consent, as a term of any injunction, to an exception in favour of the defendant to use the hoist and the space immediately to the north of it and adjacent to the northern wall of the basement (if I have not got that correct, I will be corrected in due course).

9. Obviously enough, if some arrangement along those lines is to be crafted, the defendant will need to be assured of reasonable access to that part of the space which, by concession at present, it may continue to use.

10. The next argument raised by the defendant, again without the benefit of any evidence to support it, is that the plaintiff has not been given the necessary development consent for its use. That, the defendant says, is a breach of the lease. That may be so. If it is proved, the defendant may rely upon it as an alternative ground for seeking possession.

11. If however that circumstance arises, I would strongly recommend to the defendant that it approach the Court rather than resort to self-help. There is some suggestion in the evidence that the defendant has not been too careful in observing the terms of the injunction granted on 22 October 2018. Although I do not intend to express a conclusion on that, I should make it perfectly plain (as I observed in the course of argument) that the Court does not look kindly upon those who, in disregard of its orders, seek to exercise what they believe to be their rights.

12. It remains the case that there is a serious question to be tried. That again leads to consideration of the balance of convenience. But for the matters to which I have referred, the balance of convenience would lie entirely in favour of the plaintiff as matters stand. It is paying its rent. It has given a bank guarantee for the rent. There is, in addition, the guarantee of its director. Apart from the question of council consent, there is no suggestion of breach.

13. However, the question of balance of convenience should seek to accommodate the defendant's apparent need to use at least part of what appear to be the leased premises. That, as I have said, can be achieved by grafting a term on to any injunctive relief that is granted.

14. There were submissions put as to costs. It seems to me that the appropriate position is that the costs incurred to date should be costs in the proceedings. I say that because it may very well turn out to be the case that the defendant is shown, retrospectively, to have been justified.

15. The general position as to the costs of interlocutory applications is that set out in UCPR r 42.7. That rule suggests that unless the Court orders otherwise, the costs of any interlocutory application ought be dealt with in the same way as the general cost of the proceedings. The reason for that is, clearly enough, that at the interlocutory stage, the Court cannot express a definitive view on who is right and who is wrong. As always, there are exceptional cases. I do not think that this is one of them.

16. There are some procedural matters that require attention. One is that the matter should proceed on pleadings. That will be so a fortiori if, as I imagine will prove to be the case, the plaintiff seeks to have the lease rectified. In any event, it will be necessary for the defendant's position to be articulated in a pleading.

17. The other procedural issue is that this is a matter that should be continued in the Real Property List and in due course I will make orders to deal with that.

18. For those reasons I propose to grant interlocutory relief. I should make it perfectly clear that the relief that I propose to grant is directed to the situation that has arisen. It is not intended to prevent the defendant from asserting a right to terminate the lease (subject to compliance with any applicable statutory restriction on that right) if there is some breach (as, for example, is suggested in respect of the absence of council consent). But I stress that if this is to happen, it should be a right articulated in this Court and not one sought to be enforced by self-help.

19. I make the following orders:

1. I note that the plaintiff, by counsel, gives the usual undertaking as to damages.

2. Upon condition that, until the further order of the Court, the defendant may use that part of the Premises described in the Schedule to these orders and may have reasonable access to that part over and through the Premises, order that the defendant be restrained until the further order of the Court from, by itself, its servants or agents or otherwise interfering with the plaintiff's use and quiet enjoyment of the Premises described in the lease between them that commenced on 1 January 2018.

3. I direct that the matter continue on pleadings.

4. I direct the plaintiff to file its Statement of Claim by 8 November 2018 and the pleadings thereafter continue in accordance with the rules.

5. I list the matter for directions in the Real Property List on Friday, 16 November 2018.

6. Order that the costs to date be costs in the proceedings.

20. The Schedule is that part of the Premises defined in the lease, being the interior space defined by the northern wall of the basement forming part of the Premises, the western wall running south from the northern wall to the northern side of the entry to the basement, a line running thence perpendicular east to the eastern wall of the Premises and from the point of intersection of that line with the eastern wall, that wall north to the northern wall.

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Decision last updated: 25 October 2018