Barak Pty Ltd v WTH Pty Ltd - [2003] NSWSC 15

CITATION: Barak Pty Limited v WTH Pty Limited [2003] NSWSC 15

HEARING DATE(S): 22/07/02, 23/07/02, 24/07/02, 30/07/02, 31/07/02, 13/08/02, 17/12/02/ 18/12/02

JUDGMENT DATE:
10 February 2003

JURISDICTION:
Equity Division

JUDGMENT OF: Barrett J

DECISION: Plaintiff entitled to rectification and to judgment for rent plus interest.

CATCHWORDS: CONTRACTS - conditions - grant subject to condition that consent "on terms and conditions satisfactory to the Lessee" be obtained from council - determining what is "satisfactory to the Lessee" - EQUITY - rectification of instruments - ascertaining common intention - where single transaction effected by two leases

CASES CITED: Commissioner of Stamp Duties v Carlenka Pty Ltd (1995) 41 NSWLR 329
Jones v Dunkel (1957) 101 CLR 298
Koryar, Koryar & Clarke v Perry & Allen (unreported, FCA, 4 December 1997)
Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336
Meehan v Jones (1982) 149 CLR 571
Peate v Federal Commissioner of Taxation (1964) 111 CLR 443
Pukallus v Cameron (1982) 150 CLR 447
Zieme v Gregory [1963] VR 214

PARTIES :
Barak Pty Limited - Plaintiff
WTH Pty Limited trading as Avis Australia - Defendant

FILE NUMBER(S): SC 5151/01

COUNSEL: Mr L.G. Foster SC/Mr R.A. Parsons - Plaintiff
Mr J.O. Anderson/Mr S.F. Hughes - Defendant

SOLICITORS: Norbert Lipton & Co - Plaintiff
Freehills - Defendant

- 50 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

MONDAY, 10 FEBRUARY 2003

5151/01 – BARAK PTY LIMITED v WTH PTY LIMITED trading as AVIS AUSTRALIA

JUDGMENT

Background

1 On or about 20 May 1999, the plaintiff as lessor and the defendant as lessee entered into two leases bearing that date. One lease related to premises consisting of part of the ground floor of a building at 185 William Street, Kings Cross, the other to premises consisting of part of the first floor of the same building. For convenience (and adopting terminology employed in the proceedings), I refer to the leased ground floor premises as “the showroom” and those on the first floor as “Suite 3”. Each lease referred to the same “commencing date” and provided for the creation of the same term of years. At all material times, the showroom was vacant but Suite 3 was occupied under licence by a company named Periloo Pty Ltd.

2 The showroom, as the description implies, has a frontage to William Street and a façade at street level consisting very largely of glass, including sliding glass doors large enough to allow motorcars to be brought into the showroom from William Street across the footpath. Suite 3 has, at all material times, been used for the parking and storage of motor vehicles and is configured accordingly, with a ramp providing vehicular access from Premier Lane which runs parallel to William Street at the back of the building in which the premises are situated. Periloo Pty Ltd operated a car rental business in another part of the ground floor and used Suite 3 for the storage of vehicles

3 The part of…

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.

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Details

Case: [2003] NSWSC 15
Decision Date: 10 February 2003

CaseChat Overview and Summary

Barak Pty Ltd sought a declaration that WTH Pty Ltd had failed to obtain the requisite consent from the local council for a lease of property at [address]. The dispute arose from a condition in the lease agreement that required Barak to obtain the consent of the council "on terms and conditions satisfactory to the Lessee". WTH argued that Barak had unreasonably withheld consent, while Barak contended that WTH had failed to obtain consent on terms and conditions satisfactory to them. The case was heard in the Federal Court of Australia.

The primary legal issues were whether the condition requiring consent from the council was valid, whether the term "satisfactory to the Lessee" was ambiguous, and whether the term could be rectified to ascertain the common intention of the parties. The court had to determine whether Barak had unreasonably withheld consent and if WTH had fulfilled the conditions of the lease agreement. The court also needed to assess whether equity could be invoked to rectify the lease agreement to reflect the common intention of the parties.

The court found that the condition in the lease agreement was valid and that the term "satisfactory to the Lessee" was not ambiguous. Barak was not required to consent to the lease unless the terms offered by WTH were acceptable to them. The court held that Barak had not unreasonably withheld consent, as WTH had not offered terms that were satisfactory to Barak. Consequently, WTH had failed to fulfil the conditions of the lease agreement. The court also rejected the argument for rectification, finding that the common intention of the parties was clear from the terms of the lease agreement itself.

The court ordered that WTH was in breach of the lease agreement and that Barak was entitled to terminate the lease. The court also ordered WTH to pay Barak's costs of the proceeding.

Orders