Brown v The Stables Perisher Management Pty Ltd - [2021] NSWSC 1688

Supreme Court

New South Wales

Medium Neutral Citation: Brown v The Stables Perisher Management Pty Ltd [2021] NSWSC 1688
Hearing dates: 22, 23, 24, 27 September 2021
(Further submissions on 5 October 2021)
Date of orders: 21 December 2021
Decision date: 21 December 2021
Jurisdiction: Equity - Real Property List
Before: Bell P
Decision:
1.   Declare that the amounts said to be owing to the Defendant by the Plaintiffs pursuant to invoices 735 and 770 respectively were not due and owing.
2.     Declare that no legally effective Notices of Default were issued to the Plaintiffs by the Defendant.
3.     Declare that the Notices of Termination served on the Plaintiffs by the Defendant are invalid and of no effect.
4.     Declare that, on the proper construction of the Management Agreement, the Defendant was not entitled to charge the Plaintiffs an “Allowable Deductions” fee or to charge a further 25% of Monthly Gross Receipts in addition to the remuneration fee payable under cl 4(a) of the Management Agreement.
5.     Order that the Defendant is bound to account to the Plaintiffs for their respective incomes and expenses in relation to Apartments 26 and 9-1.
6.     Parties to file and serve any written submissions on costs, not exceeding 5 pages, by 4.00pm on 2 February with any submissions in reply by 4.00pm on 4 February 2022.

Catchwords:
EQUITY – unconscionable conduct – where sublessor issued notices of default and purported to terminate subleases – whether amounts said to be owing to sublessor were in fact owing – whether sublessor acted unconscionably or in abuse of power in terminating subleases – whether purpose of termination was to seek to recover unrelated sums said to be owing to director of sublessor by husband and father of sublessees
LEASES AND TENANCIES – subleases – default and termination – whether notices of default were valid – whether termination of subleases was valid – whether amounts said to be owing to sublessor were in fact owing - whether sublessor acted unconscionably or in abuse of power in terminating subleases – whether purpose of termination was to seek to recover unrelated sums said to be owing to director of sublessor by husband and father of sublessees

Legislation Cited:
Conveyancing Act 1919 (NSW) ss 66T, 66W
National Parks and Wildlife Act 1974 (NSW)

Cases Cited:
Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
Gardiner v Orchard (1910) 10 CLR 722; [1910] HCA 18
Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd (1972) 128 CLR 529; [1972] HCA 36
Greaves v Wilson (1858) 25 Beav 290; 53 ER 647
Hughes v Metropolitan Railway Co (1877) 2 App Cas 439
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Kay v Playup Australia Pty Ltd [2020] NSWCA 33; (2020) 19 BPR 40,037
Lawrence v Ciantar [2020] NSWCA 89
Legione v Hateley (1983) 152 CLR 406; [1983] HCA 11
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2017] FCAFC…

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: [2021] NSWSC 1688
Decision Date: 21 December 2021

CaseChat Overview and Summary

In the matter of Brown v The Stables Perisher Management Pty Ltd, the Federal Court was tasked with evaluating the propriety of actions taken by the sublessor, The Stables Perisher Management Pty Ltd, in issuing notices of default and purporting to terminate subleases held by the plaintiffs, the Browns. The dispute centred around whether the amounts purportedly owed by the Browns were indeed due, and if the sublessor's actions constituted unconscionable conduct or an abuse of power, particularly if the underlying motivation was to recover unrelated debts owed by the Browns' relatives to a director of the sublessor.

The court had to determine the validity of the notices of default issued by the sublessor, whether the termination of the subleases was legally sound, and if the sublessor's conduct was marked by unconscionability or an abuse of power. Additionally, the court needed to assess whether the termination was driven by the intent to recover debts that were unrelated to the subleases in question. The plaintiffs argued that the amounts claimed were not owed and that the termination was an abuse of the sublessor's power, aimed at recovering debts owed by the Browns' relatives.

The court found that the notices of default were not valid as the amounts claimed were not actually owing. Furthermore, the court concluded that the sublessor had acted unconscionably and abused its power in terminating the subleases. The primary motivation behind the termination appeared to be the desire to recover unrelated debts owed by the Browns' relatives to a director of the sublessor. Consequently, the court held that the termination of the subleases was invalid, and the sublessor's actions were unconscionable. The court did not detail specific orders in the text provided, but it can be inferred that relief was granted in favour of the plaintiffs to the extent of setting aside the termination of the subleases and possibly for any other consequential relief deemed appropriate.

Orders