Supreme Court of South Australia
(Court of Appeal: Civil)
BCCM GROUP PTY LTD v ASAP23 PTY LTD
[2022] SASCA 139
Judgment of the Court of Appeal
(The Honourable President Livesey, the Honourable Justice Doyle and the Honourable Justice Bleby)
21 December 2022
LANDLORD AND TENANT - LEASES AND TENANCY AGREEMENTS - TERM OF LEASE OR TENANCY - DURATION - OTHER MATTERS
LANDLORD AND TENANT - LEASES AND TENANCY AGREEMENTS - CONSTRUCTION AND INTERPRETATION
REAL PROPERTY - TORRENS TITLE - LEASES - DETERMINATION
The appellant is the lessee of premises within a Shopping Centre.
The respondent became the registered proprietor of the Shopping Centre, and thereby lessor of the premises in November 2019.
The appellant seeks leave to appeal against the dismissal by a single judge of an appeal against orders made by a magistrate that the appellant vacate the premises.
The respondent proposes to demolish the existing car and dog wash and construct a retail fuel outlet with associated amenities.
The respondent purported to issue a notice to terminate the lease under clause 25 which operates where the respondent lessor has in contemplation development including “reconstruction” that “cannot be carried out practicably without vacant possession of the Premises”. The central issue on appeal was the breadth of the meaning of the word “reconstruct”.
The Court held (Livesey P and Bleby JA, Doyle JA) dismissing the appeal:
1.The natural and ordinary meaning of the word "reconstruct" when read within the lease as a whole, having regard to the commercial context in which the clause was intended to operate, included the proposed development such that the notice served under clause 25 was valid.
2.There are insufficient indications in the lease or the commercial context more broadly to support circumscription of the ordinary meaning of the word "reconstruct" in clause 25 notwithstanding the absence of the word "demolition" in the same clause.
3.It has not been shown that the appeal judge erred in his approach to the appeal from the decision of the magistrate. It has not been shown that he made any material error of fact or law.
4.The issues raised by this appeal are of sufficient difficulty and importance to warrant the grant of leave to appeal.
Retail and Commercial Leases Act 1995 (SA) ss 3, 39, 68, referred to.
Agar v Nokes (1905) 93 L.T. 605; Alcatel Australia Ltd v Scarcella (1988) 44 NSWLR 349; Advance Fitness Corp Pty Ltd v Bondi Diggers Memorial & Sporting Club Ltd [1999] NSWSC 264; Australian Mutual Provident Society v 400 St Kilda Road Pty Limited [1990] VR 646; Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; Ashworth v Gloucester [2002] 1 All ER 377; Bamford v Pozenel [2001] SASC 414; BCCM Group Pty Ltd v ASAP23 Pty Ltd [2022] SASC 141; BCCM Group Pty Ltd v ASAP23 Pty Ltd [2021] SAMC 140; BCCM Group Pty Ltd v ASAP23 Pty Ltd (No 2) [2022] SAMC 17; Bickmore v Dimmer [1903] 1 Ch 158; Birmingham…
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- Case
- [2022] SASCA 139
- Decision Date
CaseChat Overview and Summary
The central legal issue before the court was the interpretation of the word "reconstruct" as used in clause 25 of the lease. Specifically, the court had to determine whether the respondent's proposed redevelopment, which involved demolishing the existing premises and constructing a substantially different retail fuel outlet, constituted a "reconstruction" within the meaning of the lease. The appellant argued that "reconstruct" was confined to rebuilding that was substantially similar in size and character to the original structure, and therefore the proposed works were not permissible under clause 25.
The court considered the principles of contractual interpretation, noting that the meaning of words like "reconstruct" is context-dependent. Drawing on established authority, the court acknowledged that "reconstruction" can encompass a range of meanings, from adhering closely to the original structure to a more significant departure from the past state of affairs. The court found that the purpose of clause 25, derived from its wording and the surrounding circumstances of the lease, was crucial in determining the scope of "reconstruct." While the court acknowledged potential unfairness to the appellant, particularly regarding the lessor's ability to accommodate the lessee with alternative premises, it concluded that these were matters for equitable relief and not central to the interpretation of the lease clause itself.
Ultimately, the court found no error in the approach taken by the lower courts in their interpretation of clause 25. Leave to appeal was granted due to the importance and difficulty of the issues raised, but the appeal itself was dismissed.
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