Avwin Pty Ltd v Pt Limited

[2024] NSWSC 436

Supreme Court

New South Wales

Medium Neutral Citation:

Avwin Pty Ltd v PT Limited [2024] NSWSC 436

Hearing dates:

19 April 2024

Date of orders:

19 April 2024

Decision date:

19 April 2024

Jurisdiction:

Equity

Before:

Hammerschlag CJ in Eq

Decision:

(1) The injunction granted on 10 April 2024 and varied on 16 April 2024 is discharged.

(2) The plaintiff is to pay the defendant’s costs of, and incidental to, the application to discharge the injunction. Those costs include the costs of today.

(3) Costs are otherwise reserved.

Catchwords:

EQUITY – Injunctions - Where parties seek an urgent final hearing of whether the plaintiff is in lawful possession of premises as a tenant – Where the plaintiff has an injunction restraining the defendant landlord from entering the premises – Where the plaintiff no longer contends that it has any right to occupy the premises other than by way of a monthly holding over and the monthly holding over will not extend beyond 15 May 2024 – Where the landlord has entered into a registered lease with an alternate tenant which is to commence on 1 May 2024 – Where the final hearing will therefore only relevantly determine whether a maximum period of two weeks’ occupation is lawful – HELD balance of convenience does not favour continuation of the injunction and it is discharged – HELD an urgent hearing on a final basis is not needed

Category:

Procedural rulings

Parties:

Avwin Pty Ltd ACN 609 932 176 (Plaintiff/Second Cross-Defendant)
P.T. Limited ACN 004 454 666 (First Defendant/First Cross-Defendant)
Zilver Chatswood Restaurant Holding Pty Ltd ACN 604 184 8858 (Second Defendant/Cross-Claimant)

Representation:

Counsel:
DK Smith (Plaintiff/Second Cross-Defendant)
G Farland (First Defendant/First Cross-Defendant)
PT Russell (Second Defendant/Cross-Claimant)
Solicitors:
Bruce & Stewart Layers (Plaintiff/Second Cross-Defendant)
Holding Redlich (First Defendant/First Cross-Defendant)
Maxim Legal Pty Ltd (Second Defendant/Cross-Claimant)

File Number(s):

2024/00109195

Publication restriction:

Nil

Ex Tempore JUDGMENT (Revised)

1. HIS HONOUR: This judgment is being delivered on a Friday afternoon after a fairly busy list in a matter attendant with some urgency and is therefore in somewhat truncated form.

2. The plaintiff, as Lessee (by assignment), and the first defendant (Westfield) as Lessor, are parties to a registered lease (the Lease) for premises known as shop 600, in the Westfield Chatswood shopping centre, from which the plaintiff has conducted a restaurant business. The fixed term of the Lease expired on 31 March 2024. The plaintiff has remained in possession. It contends that it is holding over under the Lease.

3. The proceedings were commenced on 22 March 2024 by Summons issued with leave granted by me, sitting as Duty Judge. The Summons sought an injunction restraining Westfield from taking steps to re-enter the premises and as final relief a declaration that Westfield and the plaintiff entered into an agreement to vary the Lease by extending it so as to expire on 31 December 2025. This claim has been described during the proceedings as one of an “equitable lease”. There was no claim that the plaintiff was holding over. This was made by way of a subsequent amendment.

4. Clause 23.4 of the Lease provides for the Lessee to hold over after the Lease expires, on a monthly tenancy, with the consent of the Lessor, terminable on thirty days’ notice in writing. It is a hotly contested issue whether Westfield consented. It says it did not. The plaintiff, on the other hand, says that Westfield consented because it demanded and accepted rent for the period until the middle of May. Westfield says this was by mistake and that it will repay the money. I am prepared to proceed on the basis that the plaintiff has a good arguable case that there was consent. There is also a question whether or not the plaintiff's holding over gives it a legal, as opposed to a merely equitable interest, on the footing that it is holding over under a registered lease. This has possible significance in relation to priority, given that Westfield has entered into a registered lease with a new tenant, referred to below.

5. Westfield has entered into a new lease with the second defendant (Zilver), which lease was registered in September 2023. It has a commencement date of 1 May 2024 and a termination date of 30 April 2032. Whatever else may be said, it is plain that the plaintiff will have no entitlement on any basis, to be in the premises after 15 May 2024 (and it now does not contend otherwise). Indeed the plaintiff no longer says (as it did when leave was given to it to commence the proceedings with an abridgment of time for service) that any equitable arrangement it may have entered into with Westfield gives it a right to occupy the premises which trumps the registered interest of Zilver. The plaintiff now says that any relief which might flow from a breach by Westfield of the equitable lease is restricted to damages. It follows that for present purposes, its claim of an equitable lease has no relevant impact. It also means that the urgent tension in this case concerns a maximum of about two weeks occupancy of the premises.

6. On 10 April 2024, Lindsay J restrained Westfield from interfering with the plaintiff's possession of the premises until 16 April 2024 or further order. His Honour varied that order on 16 April 2024 to extend the operation of it until further order. His Honour directed that the proceedings be listed before the Expedition List Judge and reserved to the Expedition List Judge the question whether the proceedings should be listed before the Duty Judge or another Judge for final hearing.

7. The proceedings came before me today because the current expedition Judge (Rees J) is away on leave. I was initially minded to try as a separate question whether the plaintiff is holding over under the lease. I directed counsel for the parties to formulate a set of issues. Counsel for Westfield submitted that the question should also include whether the plaintiff has or had an equitable lease. This was resisted by counsel for the plaintiff on the basis that the plaintiff would not be ready to deal with that issue and it related solely to a prospective claim for damages.

8. There is thus significant tension between the plaintiff on the one hand and Westfield and Zilver on the other arising out of the fact that the plaintiff says it is holding over and is entitled to be there and the defendants are parties to a lease which has as its commencement date 1 May 2024.

9. In these circumstances it seemed somewhat illogical to me that the plaintiff, which has given the usual undertaking as to damages, would be maintaining the position that the injunction should continue, when it accepts that it will not be able to maintain an argument that it is in lawful possession after the middle of May 2024 and has abandoned any suggestion of the equitable lease giving it any such right.

10. It was also my distinct impression that the plaintiff was resisting the earliest hearing that could be given. I enquired of counsel for the plaintiff (prefacing the question by saying that he did not have to answer it) why the plaintiff was doing this. He declined (as he was entitled) to answer but later during the discourse it was conveyed to me that a reason is that there are commercial settlement negotiations between Westfield and the plaintiff. It is plain that the plaintiff is maintaining its position, amongst others, to have leverage in negotiations.

11. Consistently with this, counsel for the plaintiff candidly informed me with respect to the plaintiff’s claim for holding over that they “don't want damages”. This coupled with the fact that if Westfield locks the plaintiff out, the plaintiff will have a claim for damages under the lease for a maximum of about two weeks and a claim for damages of the alleged equitable lease. Damages is an adequate remedy.

12. It is not in dispute that Westfield and Zilver are parties to a lease to commence on 1 May 2024.

13. Zilver claims that it is exposed to a possible loss under a contract which it has entered into with a shopfitter which on its face has a provision requiring the payment of a deposit which may be forfeited if there is a delay. The suggestion was made, and I put it no higher than that, that the contract said to be between Zilver and the shopfitter is not a genuine document. I take this to be a suggestion that it is a possible concoction for the purposes of these proceedings. I am not in a position so to find and I do not take into account as a significant factor the potential exposure of Zilver to the shopfitter.

14. There is also a question as to the efficacy and value of the undertaking as to damages given by the plaintiff in that it is a trustee company, and the assets of trust have not been disclosed at this point.

15. The plaintiff says it is continuing to trade from the premises but the evidence as to that is sparse to say the least. There is no suggestion that the plaintiff has any bookings or assessment of what damage the plaintiff might suffer in the event that it is shut out of the premises before on or before 16 May 2024.

16. On the other hand, it is plain that Zilver has a lease and is intending to take possession of the premises as soon as it can. It was argued that the evidence indicates that Zilver is not in fact ready to go into the premises because of problems with the shop fitting and the approval of plans. That may or may not be the case. The reality is that if the plaintiff remains in the premises beyond 1 May 2024 concomitant delay will be caused. It cannot be gainsaid that delay will be prejudicial to Zilver.

17. Whatever the position that may have pertained when the matter was before Lindsay J, the balance of convenience does not, and distinctly does not, favour continuation of the injunction. The defendants’ applied for discharge of the injunction. I hereby discharge it.

18. In the circumstances there is no need for an urgent final hearing, and I vacate all directions I have made this morning with respect to an urgent final hearing.

19. Given that an equitable lease is no longer part of the basis to stay in the premises, and without it, the only possible basis is a holding over from month to month. There is and, on one view of things, never was, any legitimate reason for an urgent final hearing.

20. The plaintiff is to pay the defendants’ costs, of and incidental to, of the application to discharge the injunction, which costs include the costs of today. Costs are otherwise reserved. I will stand this matter over before the Real Property List Judge on 3 May 2024.

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Decision last updated: 22 April 2024