Alystar Pty Ltd v Hiroshi Taniai
[1991] FCA 880
•25 Jul 1991
Q \
JUDGMENT NO. .mO..:/...lll.I
IN THE FEDERAL COURT OF AUSTRALIA ) No. QG 95 of 1991 OUEENSLAND DISTRICT REGISTRY 1
GENENLL DI-VISlQ-N p )
RETWEEN: ALYSTAR PTY. LTD. Applicant
AND : HIROSHI TANIAI First Respondent
AND : SAC11 IKO TANIAI - Second Respondent
AND : RAPTIS GROUP LIMITED
Thj rd Respondent
AND : LANCRRY PTY. LTD. Fourth Respondent
AND : URSULA EVA BADGER Fifth Respondent
AND : RAYMOND FRANK BURGESS Sixth Respondent
AND: INTGOL PTY. LTD. Seventh Respondent
3.
C0st.s of today be reserved. MINUTES OF ORDER
JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 75 JULY 1991 WHERE MADE! BRISBANE THE COURT ORDERS THAT:
1. The application for an interim inj~~nction he reiused. 2. The matter be adjourned for further hearing, if the
applicant wi-shes to p~~rsue jt further, to Friday 9 August 1991, not before 11 a . m .
3 . Costs of today he reserved.
NOTE: Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA 1 No. QG 95 of 1991 9UEENSLAND DISTRICT REGIS'PRJ 1 GENERAL DIVISION 1
BETWEEN: ALYSTAR PTY. LTD. Applicant
AND: - HIROSHI TAN= First Respondent
AND: SACHIKO TANIAI Second Respondent
AND : RAPTIS GROUP LIMITED Third Respondent
AND : LANCMY PTY. LTD. Fourth Respondent
AND : URSULA EVA BADGER Fifth Respondent
AND: RAYMOND FRANK BURGESS Sixth Respondent
AND : INTGOL PTY. LTD. Seventh Respondent
CORAM: PTNCUS J.
PLACE: BRISDANE
DATE: 25 JULY 1991
EX TEMPORE REASONS FOR JUDGMENT
Thj.s is an applixation for interlocutory relief in a
case which involves a shop lease. The applicant's case, as
opened by their counsel, Mr. Rain, involves a number of
separate proposjt.ions hut it is necessary for present purposes
to discuss only two of those. The reason is that some of the
matters raised by Mr. Bain, he frankly conceded, were not of
pressing urgency, although he said they were urgent in a
general sense; only a short-term injunction js in question.
The immediate problem with which I have to deal is
the question of the rights and liabilities as between the appljcant and the landlords, who are the first and second respondents. Mr. Bain, on my informing him that I proposed to
deal with the matter this way, argued the case only insofar as
it relates to interlocutory relief against the landlords.
The contention which Mr. Bain puts forward is that,
at Ieaqt in the short term, it is just and convenient to grant
an injunction restraining the first and second respondents
from forfeiting the applicant's lease and also to give other
interlocutory re1 ief, perhaps on the basis that the appl icant
has a claim against the first and second respondents under
s.52 of the Trade Practices Act 1974 ("the Act"), as well as
in contract.
The basis of the claim sufficiently appears from the
affidavit of Mr. Webb, the managing director of the applicant,
which was f i led on 5 Ju1.y 1991 . In his aff idavj t Mr. Wehb
explains the nature of the applicant's business; it is
unnecessary to go into it in detajl, other than to say that
the applicant stocked the shop to which the dispute relates
with furnishings, lounge suites, tables, ohjets d'art, and the
like. Prlor to enLeri.ng into the lease jn question Mr. Webb,
according to his affidavit, had a conversation with a Mr.
Sharley. Mr. Sharley was then representing the owner of the
premtses, the thj rd respondent. Accordi-ng to Mr. Wehb's
affidavit, Mr. Sharley, the property manager of what was
described in the affidavit as the Raptis Group, extolled the
location of the shop and explained that jn the shopping centre
in which it was located there would only be one other retail
furnishing tenant, whlch he identified.
Mr. Sharley said there would be other home
improvement shops in the centre. He made statements about the
Ii-kelihood of business being available from nearby housing
development and he made an offer of a six month rent free
period. Mr. Webb says that, in view of what Mr. Sharley said,
he agreed to sign an offer to lease the shop; it was
designated in the shopping centre plan as shops 1 1 and 12, the
two apparently bei-ng combined together. He sjgned an offer to
lease in November 1988 and subsequently he executed a lease.
The offer to lease requjred the applicant to sign an
agreement for lease, and clause 11, which Mr. Rain
particularly relies on, reads, in part, as follows:
"The Lessee . . . will execute...an Agreement for
Lease ("T,ease") to be prepared by the Solicitors for the Lessor, Messrs Hopgood &
Ganjm. Svch Lease for subseqi~ent execution by the parties will contain all provisions for the
Lessor's benefit which Mpssrs ilopgood & Ganjm
jn thcj r absolute rliscretjon consjrlcr appropriate Lo a loase of p r ~ m i s ~ s in the Centre and whlrh are riot inconsistent: with the
essential elern~nts which are set out h~rein
( j nclriding a.; to g11arati1.ees and the Lesqor' s relnecljes on dcfaul l . anrl tho J,nssor's powar nf
r~gulation) " .
The af f idavit says:
"'l'he Offer to Lease contained no reference to
any non-excl11s i ve franchise cl alise whj ch would have the effect of allowing the landlord to
offer other shops in the Centre for lease for
suhs tanti-all y sjmilar business purposes to those of Alystnr" .
Mr. Bain explained to me that by the rather curious
expression "non-exclusive franchise clause" the draftsman of
the affidavit intended to convey the notion of a clause
dealing with the subject matter of competing businesses.
Then the affidavit goes on to say that in early December 1988 the deponent received a lease from the then owner, the third respondent, for signature and that it
contained a clause reading as follows:
"Jt js agreed by and between the parties hereto
that no exclusive franchise is given to the
1,essee and the Lessor shall. be at ljb~rty now or at any titne hereafter to let any part or
ports of the complex for any purpose jt sees
fit notwithstanding that. such purpose may bethe same or sin~i.lar to the permitted use".
T infer from the language of the affidavit that this
clause, which is argued to be inconsistent with what Mr.
Sharley had said, was noticed by the deponent because he says
at page 10 of his affidavit:
"J attached no particular signifjcance to the
non-exrlusive franchise clause because of what
Mt Sharley had sajrl to me before signjng the
Offer to Lease with regard to nundall Circle and, particularly, tllat there would he only one
other retai l fur~ii sher in nut~clal l Circle wttich
would not hp in competi t.jon wi L11 A1 yst ar. I also took some comfort in the fact that the
Offer t.o Leas* had not made any mentjon of anon-exclusi-ve franchise clause, and I thought
that perl~fips {.here had been some mistake by the landlord in pul.ting the clauqe into the lease.
I had no reason to believe that the Lessor
wnrlld do anything other than abide by therepresentations of Mr Sharley seL out above and
thr terms of tl~e Offer to Lease. T tlinrefore executed Lhe lease as required".
Tt appears to me to be an important circumstance
that Mr. Webb does not suggest in his affidavit that he signed
the lease in ignorance of its content, or that he signed it
having being misled as to its content.
Then the property was sold in the following year to
the present owners who are the first and second respondents.
To put it sjmply, they do not recognize any obligation with
respect to what. is rather inartistjcally called the non-
exclusive franchise question, other than the terms of the
lease. It is suggested by Mr. Bain that their failure to
abide by what the former owner's representative said to Mr.
Webb before they purchased the freehold may be used against
them; I do not quite understand why that should be so.
The basis upon which Mr. Bain puts the case, so far
as the present application is concerned, is twofold. Firstly,
he says that as a matter of contract he may succeed against
the first and second respondents. He mentioned rectjfication,
without actually submitti.ng that a case for rectification
might succeed. Any case for rectifi-cation would meet the
difficulty that there was not a mistake of a relevant kind;
t h e c o n t e n t o f t h e l e a s e was, a s I i n f e r f rom what M r . Webb
s a y s , known t o h i s s i d e , and p resumab ly known t o t h e o t h e r
s i d e . Ano the r c o n t e n t i o n which M r . Ra in makes w i t h r e s p e c t t o
t h e c o n t r a c t i s , I t h i n k , n o t u n f a i r l y p u t by s a y i n g t h a t i f
o n e h a s t o i d e n t j f y t h e t e r m s o f t h e c o n t r a c t between t h e
f i r s t and second r e s p o n d e n t s and t h e a p p l i c a n t , o n e c a n n o t i g n o r e what t h e f o r m e r o w n e r ' s r e p r e s e n t a t i v e s a i d , and t h a t
t h e s t a t e m e n t s made b y him s h o u l d b e t r e a t e d a s p a r t o f t h e
c o n t r a c t . T h i s h a s n o t been t h e o r t h o d o x a p p r o a c h o f t h e
s y s t e m o f l aw u n d e r which t h i s c o u n t r y o p e r a t e s . I t is t r u e
t h a t i n some c i r r u m s t a n c e s o r a l s t a t e m e n t s made p r i o r t o
c o n t r a c t which a r e c o n t r a d i c t e d by t h e terms o f t h e document
a c t u a l l y e x e c u t e d may have a n e f f e c t . A s M r . Ra in s a y s , t h e y
may d o s o u n d e r p a r t i c u l a r s t a t u t e s , s u c h a s t h e Trade
P r a c t i c e s A c t ; t h e y may be a b a s i s f o r r e c t i f i c a t i o n ; and
o n e c a n t h i n k o f o t h e r ways, s u c h a s e s t o p p e l , i n which t h e y
may have a n e f f e c t . But t h e r e is no d o u b t t h a t t h e p r ima
f a c i e r u l e i s t h a t t h e p a r t i e s a r e bound i n c o n t r a c t b y what
t h e y s i g n , and i n d e ~ d , t h e r u l e h a s p a r t i c u l a r f o r c e when t h e y
a r e c o n s c i o u s o f t h e c o n t e n t o f , and n o t m i s l e d a s t o t h e
c o n t e n t o f , what t h e y h a v e s i g n e d .
The s e c o n d b a s i s upon which M r . Ra in p u t s t h e c a s e ,
js t h a t he says t h a t , i f t h e r e is a case a g a i n s t t h e t h i r d
r e s p o n d e n t , t h e f o r m e r owner , u n d e r s.52 o r s j m i l a r p r o v i s i o n s
o f t h e Ac t , t h e n by way o f r e l i e f u n d e r s . 8 7 o f Lhe A c t , t h e
C o u r t m i g h t make a n o r d e r h a v i n g t h e e f f e c t o f making t h e
p r e s e n t owners , t h e f i r s t and s e c o n d r e s p o n d e n t s , s u f f e r t h e
c o n s e q u e n c e s o f what t h e f o r m e r owner d i d .
We says that the jurisdiction which the Court has
under s.07 of the Act is wide enough to encompass the
possibility of varying the contract (by which he means the
lease) against the fi-rst and second respondents, because of
misleading conduct hy a predecessor in title. One possible
objection to that is that the Torrens legislation in this
State, as in other States, provides an inl~ibi tion against an
approach of that sort, and, in general, protects the person
who purchases on the faith of the register. ITe is entitled to
have regard to the doc~~ments which are registered and to
ignore unregistered prior dealings. Indeed, that is one of
the purposes of the system. However, it may very well be that
s.109 of the Constitutio~ is a sufficient answer to that line of argument.
My view is that it is unnecessary to decide whether
the argument Mr. Bain proposes, under s.87 of the Act, could
ever be accepted in a case of this sort. Any such contention
would have to founder if the facts were, as they seem to be
here, that the parson claiming to be misled was conscious of
the content of what was signed and, as I would infer here,
must have signed it with the knowledge that any later
purchaser of the property would be likely to rely upon the
content of what was slgned, rather than attempting to
investigate unrecorded oral statements made during
negotiations.
Jn short, whatever strength the case under s.87
might have had seems to disappear when one keeps jn mind that the first and second respondents have in a sense been misled, if Mr. Bain's contention js to be given effect to. Buying as they were entitled to do on the basis of the written lease
that the applicant had executed, they are now confronted with
the proposition put forward by the applicant that prior to
executing that lease, they had entered into certain dealings
which in very important respects altered the effect of what
was signed.
I thjnk that neither in contract nor under the Trade
Practices Act does the case advanced by the applicant against the first and second respondents have any real strength. There are authorities suggesting that the Court, in determining an application for interlocutory relief, should not attempt to predict the result of the trial, and there are others which point to the possibility of considering the strengths of the case as a matter of exercise of discretion. Tt is my opinion that in a matter of this sort it may he important to consjder the relative strengths of the opposi.ng
cases; the case against the first and second respondents, as
I apprehend it, is rather weak.
It is weak because one has an applicant who, knowing
the content of the lease, signs it, does not give any warning
to any prospective purchaser that it does not properly reflect
the contract he made, and then, in effect, seeks to enforce an
oral agreement inconsistent wit.h the written one against the
i-nnocent purchaser of the freehold. That proposition is quite
unattractive, and I would find it diffjcult to believe that a
Court would regard it as fair to the first and second
respondents.
The view I take is that the case advanced against
the first and second respondents in contract and under s.52 is
not of sufficient strength to warrant the exercise of a
discretion in favour of the applicant, and T will refuse the
interlocutory relief sought. My refusal Ls of an interim kind
in the sense that T have considered the matter, as I primarily
said, only on the basis that Mr. Bain is content to seek
relief for a fairly short period until the Court can give more
time to a proper consideration of all the ramifications of the
case, and in partlcular, what might be described as the anti-
trust aspects of it. Time has not permitted that thi.s
morning. What 1 propose to do then is simply to refuse any
injunction today and to adjourn the matter for furth~r hearing i.f the applicant wishes to pursue i.t further.
1 will adjourn the matter for further consideration
on Friday, August 9, not before 1 1 am and I will reserve the
costs of today for consideration on that. date.
I certify that this and the eight preceding pages are a true copy of the reasons
for judgment herpin of his
Honour Mr. Justice Pincus
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