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Aspromonte Pty Ltd v Zagari

Aspromonte Pty Ltd v Zagari

Case [1999] NSWSC 831 11 August 1999

Leases

Statutory Interpretation

Contract Formation

Property Law

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Reported Decision: [2000] 9 BPR 17,247
[1999] NSW ConvR 55-916

New South Wales

Supreme Court

CITATION: Aspromonte Pty. Limited v. Zagari [1999] NSWSC 831

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): No.3390 of 1999

HEARING DATE(S): 9th and 10th August 1999

JUDGMENT DATE:
11 August 1999

PARTIES :

Aspromonte Pty. Limited - Ptff/XDef
Francesco Zagari - Defendant/XCl

JUDGMENT OF: Hodgson CJinEq at 1

COUNSEL : Dr. C. Birch for plaintiff
Mr. N. Kidd for defendant

SOLICITORS: Agostino & Co., Fairfield for plaintiff
Stewart Levitt & Co., Sydney for defendant

CATCHWORDS: LANDLORD AND TENANT - RETAIL LEASES ACT. Prospective tenant spends $30,000 on preparation of shop, and then goes into possession and starts paying rent, in expectation of being granted a lease for not less than 6 months. Three months later, in June 1998, tenant and landlord execute a lease for 6 months with a 6 months option, commencing on 1st July, and solicitor gives a certificate under s.16 of the Retail Leases Act. Tenant claims benefit of 5 year lease. HELD that, prior to giving of the certificate, a lease had arisen to which the Retail Leases Act applied, so that its term was extended to 5 years; and that, while such a lease could be surrendered, the execution of the 6 month lease neither effected such a surrender nor displaced the pre-existing statute-extended lease.

ACTS CITED: Retail Leases Act 1994 ss.6, 7, 8, 16.

DECISION: See p.17 of judgment

- 17 -
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORAM: HODGSON, CJ in Eq.
Wednesday 11th August 1999
NO. 3390 OF 1999
ASPROMONTE PTY. LIMITED V. ZAGARI JUDGMENT
1   HIS HONOUR: The plaintiff is the owner of the property 244 Canley Vale Road, Canley Heights, which is also referred to in some of the evidence as 244a Canley Vale Road, Canley Heights. The defendant conducts a hairdressing business at that address.
2   By its summons filed on 27 July 1999, the plaintiff seeks a declaration that the property is not subject to any interest in favour of the defendant other than as a lessee from month to month, and that such leasehold interest will terminate on 27 August 1999; and an order that caveat number 5951516E lodged by the defendant against a title to that property be removed.
3 By his cross-claim filed on 9 August 1999, the defendant claims a declaration that he has the benefit of an agreement for lease of the property for a term of three years, plus an option for a further three years either from 16 March 1998 or 1 July 1999; or, alternatively, that he has the benefit of a lease for four and a half years commencing 16 March 1998, plus a six month option, pursuant to the provisions of the Retail Leases Act 1994.
4   In circumstances where the plaintiff claimed that a final decision in the matter was urgently required in connection with a liquor licensing application, I have dealt with this matter urgently on a…

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 Aspromonte Pty Ltd v Zagari

Details

AGLC: Aspromonte Pty Ltd v Zagari [1999] NSWSC 831
Case: [1999] NSWSC 831
Decision Date: 11 August 1999

CaseChat Overview and Summary

Aspromonte Pty Ltd, the owner of a retail premises, engaged Zagari to occupy the premises. Zagari invested $30,000 in preparation of the shop, went into possession, and began paying rent, expecting to be granted a lease for not less than six months. In June 1998, a formal lease agreement was executed for a term of six months with an option for a further six months, commencing on 1 July 1998. Zagari's solicitor provided a certificate under section 16 of the Retail Leases Act. Zagari contended that the lease should be extended to five years due to the provisions of the Act.

The central legal issue was whether the Retail Leases Act applied to the lease, thereby extending its term to five years, and if the execution of the six-month lease with an option could either effect a surrender of the pre-existing statutory lease or override it. Specifically, the court needed to determine whether the six-month lease could displace the statutory lease that had already been extended by the Act prior to the certificate being issued.

The court held that prior to the certificate being given under the Act, a lease had already come into existence to which the Act applied, thereby extending its term to five years. The court found that while the lease could be surrendered, the execution of the six--month lease did not effect such a surrender, nor did it displace the pre-existing statute-extended lease. Consequently, the lease remained subject to the Act's extended term.

The court's decision resulted in the six-month lease being overridden by the statutory five-year lease, which was in effect prior to the certificate. The formal six-month lease with an option did not alter the legal status of the property as extended under the Act. The court's final orders would reflect the continued application of the Retail Leases Act to the premises, maintaining the five-year lease term as initially extended.

Orders