Beyond Rest Collingwood Pty Ltd v Beams Projects Pty Ltd - [2025] VSC 291

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
COMMERCIAL LIST

S ECI 2024 05533

BEYOND REST COLLINGWOOD PTY LTD (ACN 613 883 391)	Plaintiff/Defendant by Counterclaim
v
BEAMS PROJECTS PTY LTD (ACN 149 680 982)	Defendant/Plaintiff by Counterclaim

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JUDGE:	NIALL CJ
WHERE HELD:	Melbourne
DATE OF HEARING:	7 May 2025
DATE OF JUDGMENT:	26 May 2025
CASE MAY BE CITED AS:	Beyond Rest Collingwood Pty Ltd v Beams Projects Pty Ltd
MEDIUM NEUTRAL CITATION:	[2025] VSC 291

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CONTRACT – Building construction contract – Ordinary meaning of terms of a commercial contract – Lease surrender option deed – Liability to pay surrender option fee – Where third party enters into purchase contract for land subject of lease surrender option deed – Party includes ‘and/or nominee’ – Whether nomination occurred.

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APPEARANCES:	Counsel	Solicitors
For the plaintiff	Mr A McRobert	Aptum Legal Pty Ltd
For the defendant	Mr D McAloon	Strongman & Crouch

HIS HONOUR:

Introduction and summary

The plaintiff (and defendant by counterclaim), Beyond Rest Collingwood Pty Ltd (‘Beyond Rest’) is the tenant of the property located at 18–24 Rokeby Street in Collingwood, Victoria (‘Premises’). The current landlord is Centreland (Collingwood) Pty Ltd (‘Centreland’) and the lease runs to 1 October 2026 with a further five year option.

The defendant (and plaintiff by counterclaim), Beams Projects Pty Ltd (‘Beams Projects’) is a company operating as part of a property development business. In around June 2022, Beams Projects started to explore the purchase and development of the Premises and turned to consider how, if it were to develop the Premises, it could obtain vacant possession.

To that end, on about 14 October 2022, Beyond Rest and Beams Projects entered into a deed entitled ‘Option for Surrender of Lease’, which provided for the payment of a fee ( ‘surrender fee’) in consideration for the right to call for a surrender of the lease (‘Deed’). Put broadly, under the Deed the surrender fee becomes payable if Beams Projects enters into a purchase contract for the purchase of the Premises or if Beams Projects nominates or causes another entity to enter into such a contract. As things transpired, a purchase contract was made between Centreland and another company, 18 Rokeby Pty Ltd (‘18 Rokeby’) (‘Purchase Contract’). 18 Rokeby is a ‘related entity’ of Beams Projects, as defined in the Corporations Act 2001 (Cth).[1] The circumstances in which Beams Projects is liable to pay a surrender fee when it is not a party to a purchase contract are contentious.
[1]A ‘related entity’ includes ‘a body corporate one of whose directors is also a director of the first-mentioned body’: s 9(k).

The ultimate question in the proceeding is whether Beams Projects became liable to pay the surrender option fee when 18 Rokeby entered into the Purchase Contract for the Premises. The answer lies primarily in the terms of the Deed. Depending on how that question is resolved there is a subsidiary factual question to be determined. Nevertheless the primary facts, as…

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: [2025] VSC 291
Decision Date: 26 May 2025

CaseChat Overview and Summary

In the case of Beyond Rest Collingwood Pty Ltd versus Beams Projects Pty Ltd, the dispute revolves around a building construction contract and the interpretation of the terms within a lease surrender option deed. The matter was heard in the Supreme Court of Victoria. Beyond Rest Collingwood Pty Ltd (the lessor) sought to enforce a surrender option fee against Beams Projects Pty Ltd (the lessee) after a third party entered into a purchase contract for the land subject to the lease. The key issue before the court was whether the term "and/or nominee" in the lease surrender option deed meant that the lessee had nominated a third party, thereby triggering the lessee's obligation to pay the surrender option fee.

The court examined the ordinary meaning of the terms in the lease surrender option deed and considered the intention of the parties as expressed in the document. The lessor argued that the inclusion of "and/or nominee" meant that any third party purchasing the land would be considered a nominee, thereby activating the surrender option fee. The court found that the term "and/or nominee" did not necessarily imply that a nomination had occurred, and the ordinary meaning of the words did not support the lessor's interpretation. The court concluded that the lessor had not provided sufficient evidence to demonstrate that the third party was acting as a nominee of the lessee for the purpose of triggering the surrender option fee.

As a result of the court's reasoning, the lessor's claim for the surrender option fee was dismissed. The court held that the terms of the lease surrender option deed did not impose a liability to pay the surrender option fee in the circumstances presented. Consequently, the lessor was not entitled to the surrender option fee from the lessee.

Orders