Bettervale v Warehouse Solutions International (No 3) - [2015] NSWSC 1356

Supreme Court

New South Wales

Medium Neutral Citation: Bettervale v Warehouse Solutions International (No 3) [2015] NSWSC 1356
Hearing dates: 24 August 2015, 25 August 2015, 26 August 2015, 28 August 2015 and 31 August 2015
Date of orders: 09 September 2015
Decision date: 16 September 2015
Jurisdiction: Equity - Real Property List
Before: McDougall J
Decision:
Plaintiff has judgment for possession against both defendants; orders for withdrawal of caveats; and judgment against first defendant for arrears of rent.

Catchwords:
LEASES – claim by landlord under a sublease for vacant possession – where subleases over three warehouses contained options to renew – where defendant sublessees claim they exercised that option – failure to exercise option in writing as required by the contract – whether options exercised orally – absence of satisfactory evidence to that effect – where four principal witnesses found to be lacking in credibility – issues of fact to be determined on the probabilities regarded objectively – conclusion that options never exercised
ESTOPPEL – whether plaintiff estopped from denying that options had been exercised or that new leases had been entered into – where that case depends upon uncorroborated and unreliable witness evidence – where in any circumstances no detriment – result that no estoppels arise
Legislation Cited: Conveyancing Act 1919 (NSW)
Cases Cited: Jones v Dunkel (1959) 101 CLR 298
Category: Principal judgment
Parties: Bettervale Pty Ltd (Plaintiff)
Warehouse Solutions International Pty Ltd (First Defendant)
WSI International Pty Ltd (Second Defendant)
Representation:
Counsel:
S A Lawrance (Plaintiff)
DR Pritchard SC / A Cornish (Defendants)
Solicitors:
Arnold Bloch Leibler (Plaintiff)
Spinks Eagle Lawyers (First Defendant)

File Number(s): 2015/202245

Judgment

HIS HONOUR: The plaintiff (Bettervale) is the lessee of premises at 11 Bumborah Point Road, Port Botany (“the premises” or “11 BP Road”). It subleased part of those premises, known as Warehouse 1, to the first defendant (WSI), and other parts of those premises, known as Warehouse 2 and Warehouse 3, to the second defendant (WSII).
Bettervale says that each of the subleases has expired by effluxion of time; that it has served on the defendants valid notices to quit; and that it is entitled to possession.
The defendants say that they are entitled in equity to new subleases, on a variety of grounds including that they exercised options for renewal in their subleases (or that Bettervale is estopped from denying exercise); or that they entered into fresh agreements for new subleases, effectively on the terms of the options, with Bettervale. The defendant have lodged caveats to protect their asserted interests.

Urgent hearing and urgent decision

The hearing was brought on in circumstances of some urgency, for reasons that will become apparent. It occupied some five days, from 24 to 31 August 2015. At the conclusion of the hearing, I reserved my decision.
After the reasons that follow had been prepared in draft, I notified the parties that I was in a position to deliver brief oral reasons, and to make final orders (subject to hearing the parties on…

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: [2015] NSWSC 1356
Decision Date: 16 September 2015

CaseChat Overview and Summary

The case of Bettervale v Warehouse Solutions International (No 3) involved a dispute between the landlord, Bettervale, and the defendant sublessees, Warehouse Solutions International, over three warehouses. The landlord sought vacant possession of the warehouses under a sublease, which contained options to renew. The defendant sublessees argued that they had exercised these options, but the landlord contended that they had not. The case was heard in the Supreme Court of Victoria.

The court had to decide whether the sublessees had exercised the renewal options as required by the sublease agreements. This required determining whether the sublessees had exercised the options orally, as the written form was mandated by the contract, and whether the landlord was estopped from denying that the options had been exercised. The court needed to weigh the credibility of the witnesses and assess the evidence to determine if the sublessees had indeed exercised the options to renew the leases.

In its judgment, the Supreme Court found that the sublessees had not exercised the options to renew the leases. The court held that the sublessees had failed to provide satisfactory evidence to prove that the options had been exercised orally, and found that the principal witnesses were lacking in credibility. The court further found that the sublessees had not suffered any detriment, which was a necessary condition for an estoppel to arise. Consequently, the court concluded that the sublessees were not entitled to the relief they sought.

The court ordered that the landlord was entitled to possession of the warehouses and that the sublessees' claims for estoppel be dismissed. The court found that the sublessees had not discharged the burden of proving the exercise of the options to renew, and that the landlord was entitled to vacant possession of the premises.

Orders