Byrnes v Jokona Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Byrnes v Jokona Pty Ltd [2002] FCA 41

contract – lease – lease of property for business venture – repudiation claimed – collateral contract claimed – estoppel claimed

LANDLORD AND TENANT – covenant for quiet enjoyment – express covenant – general principles – whether material interference with possession – activities of third party and of landlord – whether interference with possession interfered with commercial use of premises for the desired purposes such that business failed

TRADE PRACTICES – claim under Trade Practices Act that landlord failed to make available land surrounding leased premises for expansion of business

DAMAGES – assessment of damages for breach of lease – general principles – where argued business doomed to fail – where lease terminated before term – assessment of impact of interference and of lost future opportunity – calculation of interest

Trade Practices Act 1974 (Cth)
Federal Court of Australia Act 1976 (Cth) s 51A

Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185 applied

The Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 applied and discussed

National Carriers v Panalpina (Northern) Ltd [1981] AC 675 applied

Goldsworthy Mining Ltd v FC of T (1973) 128 CLR 199 applied

O’Keefe v Williams (1910) 11 CLR 171 applied

Southwark LBC v Tanner [2001] 1 AC 1 applied

Kenny v Preen [1963] 1 QB 499 applied

Sarson vRoberts [1895] 2 QB 395 applied

Brilee Consultants Pty Ltd v Tibal Holdings Pty Ltd (1984) 3 BPR 9272 applied

Bradford House Pty Ltd v Leroy Fashion Group Ltd (1983) 46 ALR 305 applied

Teubner v Humble (1963) 108 CLR 491 applied

Bus v Sydney County Council (1989) 167 CLR 78 applied

Browne v Flower [1911] 1 Ch 219 referred to

Phelps v City of London Corp [1916] 2 Ch 255 referred to

Aussie Traveller Pty Ltd v Marklea Pty Ltd [1997] 1 Qd R 1 applied

Owen v Gadd [1956] 2 QB 99 referred to

JC Berndt Pty Ltd v Walsh [1969] SASR 34 referred to

Martins Camera Corner Pty Ltd v Hotel Mayfair [1976] 2 NSWLR 15 referred to

Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 11,173 applied

Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 referred to

Cehave NV v Bremer Handelsgesellschaft m.b.H. [1976] QB 44 referred to

Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 referred to

Federal Commerce and Navigation Co Ltd v Molena Alpha Inc [1979] AC 757 referred to

Bunge Corp v Tradax Export SA [1981] 1 WLR 711 referred to

Shevill v Builders Licensing Board (1982) 149 CLR 620 referred to

Associated Newspapers v Bancks (1951) 83 CLR 322 referred to

Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 referred to

Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 referred to

Honner v Ashton (1979) 1 BPR 9478 discussed

Woodfactory Pty Ltd v Kiritos…

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Details
Case
[2002] FCA 41
Decision Date

CaseChat Overview and Summary

Byrnes v Jokona Pty Ltd was a case heard by the Federal Court of Australia. The primary dispute centred around the terms and conditions of a lease agreement between the first applicant, Mr Byrnes, and the respondent, Jokona Pty Ltd, represented by Mr Gazal. Mr Byrnes sought damages for breach of contract, alleging that the respondent had not fulfilled certain obligations under the lease. The court had to determine whether the respondent had breached the lease by failing to allow the applicants to use the land outside the basement for an outdoor paintball operation and whether there had been an agreement for external access to the toilets. The legal issues involved interpreting the lease agreement and assessing whether there were implied terms that would bind the respondent to the applicants' claims.

The court examined the evidence presented by both parties, focusing on the credibility of the witnesses and the consistency of their statements. It found that there were significant discrepancies between the testimonies of Mr Byrnes, Ms Wilder, and Mr Lowes on one hand, and Mr Gazal and Mr Ayoub on the other. The court concluded that the respondent had indeed breached the lease by not permitting the use of the land outside the basement for the paintball operation, as well as by not providing external access to the toilets as agreed. Given these findings, the court held that the respondent was liable for damages. The court awarded the applicants a total of $132,731, which included interest. The matter concerning the costs of the proceedings was left to be determined at a later date, and the cross-claim was dismissed with the cross-claimant ordered to pay the costs of the cross-respondents.

Orders

Orders of the court

1. there be judgment in favour of the first and second applicants jointly in the sum of $132,731, which includes interest under s 51A of the Federal Court of Australia Act 1976 (Cth) at 10.5% from 1 September 1995 to 31 January 2002 in respect of $50,000 and from 16 January 1996 to 31 January 2002 in respect of $30,000;

2. the matter be stood over to a date to be fixed for argument (if any) concerning, and the making of orders in respect of, costs of the proceedings, other than the cross-claim;

3. the cross-claim be dismissed;

4. the cross-claimant pay the costs of the cross-respondents of the cross-claim; and

5. any party have liberty to apply within 14 days concerning the form of the order in 1 above.

Background

Background to the litigation

It is convenient first to determine the extent of the legal obligations between the parties.The Facts Concerning the Relationship Between the Parties The first applicant, Mr Byrnes, was the leading force behind the setting up of the business. He was born in 1963. He was 30 or 31 when he first dealt with the principal of the respondent, Mr Gazal, and an employee of the respondent, Mr Ayoub, in May 1994. Mr Byrnes left school at the age of fifteen. He had worked at odd jobs over the years, including as a cleaner and a miller. In his mid-twenties, in “about 1988 to 1989”, he developed epilepsy. He then “went on a sickness benefit pension”. He had little or no business experience. He had been interested in sport all his life and, up to the time of his sickness, he had been active in sports. He said that he became interested in running a paintball business. He said that he was interested in setting up a business as it was difficult for him to find employment with his condition. He wanted to cease being on a pension. I accept this evidence. I find that one of the strong motivating factors moving not only him, but also others, in the relevant events was an enthusiastic desire to create a business which would provide independence and financial support for those concerned. In early 1994, with the idea of a paintball centre in mind, Mr Byrnes began looking for sites in the Liverpool area for an indoor paintball centre. He found no existing business of this kind in and around Liverpool. He was aware that there were on the outskirts of Sydney existing centres with outdoor playing fields. Mr Byrnes said that he saw advantages in an indoor centre: by allowing disabled people to play, by reducing the effects of the weather and by enabling play at night. I accept his evidence in this regard. He gathered about 1,500 signatures on a petition for the creation of such a centre, presumably, in part, to gauge public support. Mr Byrnes said that in about May 1994 he noticed a ‘for lease’ sign on the building containing the basement and in company with a Mr Stephen Lowes he inspected it. During the inspection they enquired about the basement. Shortly thereafter they met and discussed the possibility of a lease with Mr Ayoub and Mr Gazal. At this point it is necessary to interrupt the narrative and to say something of the witnesses. The evidence given by Mr Byrnes, Ms Wilder and Mr Lowes was in stark contrast to that given by Mr Gazal and Mr Ayoub, in particular concerning the arrangements for the use of the land. The differences between the witnesses were manifold and often minute. It would be impossible, without extending these reasons to inordinate length, to deal with all the inconsistencies and contradictions in the evidence. The most important cleavage in the evidence, in so far as the conduct of the case was concerned, was the question whether or not the respondent, through Mr Gazal, agreed to the applicants using the land outside the basement to extend the paintball operation to an outdoor field or fields. Another important difference in evidence concerned the toilets and whether external access was agreed to them.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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