Callaghan v Merivale CBD Pty Ltd - [2005] NSWSC 985

No judgment structure available for this case.

Reported Decision:
(2006) NSW ConvR 56-155

New South Wales

Supreme Court

CITATION:
Callaghan v Merivale CBD Pty Limited [2005] NSWSC 985

HEARING DATE(S): 08/08/05-11/08/05

JUDGMENT DATE :

20 October 2005

JUDGMENT OF:
Burchett AJ

DECISION:
Verdict for plaintiff in the action and for the cross-claimant on cross-claim.

CATCHWORDS:
Lease - rent review clauses - whether time of essence in any respect - payment of rent demanded which substantially exceeded rent due - mistake as to legal obligation - mistake induced by lessor's representation about obligation - inference from intention to induce belief that belief was induced - meaning of "anniversary" - construction contrary to ordinary meaning of word to avoid absurdity - power of court to mould language - principles of interpretation - rule as to construction of rent review clauses - indications to contrary of prima facie rule - effect of lenity in one respect and strictness in an other as an indication the strict construction must be adhered to where it is applicable - effect of lessor itself failing to comply with a time requirement - consideration of waiver as estoppel or as election - implied agreement - equitable assignment where assignor ASIC on behalf of defunct company not joined - effect - nature of renewal of a lease - effect of covenant to repair in short form under Schedule 4 of the Conveyancing Act - effect of words "having regard to the condition of the demised premises at the commencement of the lease " - meaning of covenant to replace a worn out item with one "of a like nature and equal value"

LEGISLATION CITED:
Corporations Act 2001 (Cth)
Conveyancing Act 1919 (NSW)

CASES CITED:
Gould v Vaggelas (1985) 157 CLR 215
Como Investments Pty Ltd (In Liquidation) v Yenald Nominees Pty Ltd (1997) ATPR 43
Kiriri Cotton Co Ltd v Dewani [1960] AC 192
David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353
Peking Palace Ltd (Tang's Restaurant) v Trizec Construction Limited (1987) 20 BCLR (2d) 161
Duchow v New York State Teamsters Conference Pension and Retirement Fund (1982) 691 F 2d 74
Save Our Suburbs (SOS) NSW Incorporated v Electoral Commissioner of New South Wales (2002) 55 NSWLR 642
Short v F W Hercus Pty Limited (1993) 40 FCR 511
Fitzgerald v Masters (1956) 95 CLR 420
Dockside Holdings Pty Ltd v Rakio Pty Ltd (2001) 79 SASR 374
Westpac Banking Corporation v Tanzone Pty Ltd (2000) 9 BPR 17521
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896
United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904
Gollin & Company Limited v Karenlee Nominees Proprietary Limited (1983) 153 CLR 455
G R Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80
Mecca Leisure Ltd v Renown Investments (Holdings) Ltd (1984) 49 P&CR 12
Mobil Oil New Zealand Ltd v Mandeno [1995] 3 NZLR 114
W & R Jack Ltd v Fifield [2000] 3 NZLR 129
Perri v Coolangatta Investments Proprietary Limited (1982) 149 CLR 537
Charles Rickards Ld v Oppenheim [1950] 1 KB 616
Craine v The Colonial Mutual Fire Insurance Company Limited (1926) 28 CLR 305
George v Roach (1942) 67 CLR 253
Deaves v CML Fire and General Insurance Company Limited (1979) 143 CLR 24
Johnson v Agnew [1980] AC 367
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153
33 Bank Street Nominees Pty Ltd v Citipower Pty (1997) BC 9702794
Solle v Butcher [1950] 1 KB 671
David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353
Commissioner of State Revenue (Victoria) v Royal Insurance Australia Limited (1994) 182 CLR 51
Roxborough v Rothmans of Pall Mall Australia Limited (2001) 208 CLR 516
British American Tobacco Australia Ltd v The State of Western Australia (2003) 217 CLR 30
Weddell v Pearce [1988] 1 Ch 26
Jennings v Credit Corp Australia Pty Ltd (2000) 48 NSWLR 709
Gerraty v McGavin (1914) 18 CLR 152
Lurcott v Wakely & Wheeler [1911] 1 KB 905
Commonwealth of Australia v Amann Aviation Pty Limited (1991) 174 CLR 64
Amann Aviation Pty Limited v Commonwealth of Australia (1990) 22 FCR 527

PARTIES:
Edward Callaghan (plaintiff)
Merivale CBD Pty Limited (defendant)
Merivale CBD Pty Limited (cross-claimant)
Edward Callaghan (cross-defendant)

FILE NUMBER(S):
SC 2767 of 2002

COUNSEL:
Mr P Bolster and Mr E Hyde for the plaintiff/cross-defendant
Mr G Blake SC and Ms S Higgins for the defendant/cross-claimant

SOLICITORS:
Tiernan & Associates for the plaintiff/cross-defendant
Antonys Lawyers for the defendant/cross-claimant

LOWER COURT JURISDICTION:

- 77 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BURCHETT AJ

20 October 2005

2767/02 EDWARD CALLAGHAN v MERIVALE CBD PTY LIMITED

JUDGMENT

1 On 17 May 2002, a Statement of Claim was filed on behalf of Pub Oz Pty Limited, as plaintiff, in which Merivale CBD Pty Limited was named as defendant. By the Statement of Claim, there were pleaded a lease dated 11 November 1993 of the premises of a hotel, known as the Wynyard Hotel at 107-113 Clarence Street, Sydney, for a term of five years from 21 July 1993 with an option to renew for a further five years; successive transfers of the interest of the lessors and successive assignments of the interest of the lessee, culminating in a transfer of the interest of the lessors to the defendant and an assignment in 1998 of the interest of the lessee, with the consent of the defendant, to Pub Oz Pty Limited; and a subsequent exercise of the option of renewal by Pub Oz Pty Limited extending the term of the lease by a renewed lease to 20 July 2003. It was then pleaded that the lease contained provisions in relation to the amount of rent payable from time to time, and by letter dated 16 March 1999 the defendant purported to review the rent in accordance with clause 6 of the lease, failing to carry out the review in accordance with the clause in that the purported review was carried out earlier than 120 days prior to the relevant date specified in the lease and was invalid, but the defendant relied on clause 6 (c) of the lease as requiring the plaintiff to challenge the review of the rent within 14 days after being notified of that review, and the defendant demanded rent calculated in a manner that was in breach of the lease. It was finally pleaded that the plaintiff had paid the rent demanded while asserting the correct rent should be determined by two licensed hotel valuers, which the defendant refused to have done, and the plaintiffs sought relief accordingly.

2 On 19 August 2003, consent orders were made substituting the present plaintiff as plaintiff and granting leave for the filing of an Amended Statement of Claim. By the Amended Statement of Claim, it was added to the pleading that on 16 April 2003 Pub Oz Pty Limited went into liquidation, and on 23 June 2003 the plaintiff, Edward Callaghan, purchased for valuable consideration from the liquidators all of the rights of the company associated with the matters pleaded in the Amended Statement of Claim. Subsequently, by a Further Amended Statement of Claim, the plaintiff alleged an assignment of the same rights of Pub Oz Pty Limited to him by the Australian Securities and Investments Commission following the deregistration of the company, reliance being placed on section 601AD of the Corporations Act 2001 (Cth).

3 For the purposes of a consideration of the claim made by the plaintiff, it is necessary to reproduce some provisions of the lease which are not free from a measure of complexity. Clause 6 of a set of annexed clauses deals with the subject of reviews of the annual rent for which the lease provides during the period from the date of its commencement on 21 July 1993 to the date of termination on 20 July 1998 and then for the ensuing period of any renewal under the option to renew from 21 July 1998 to 20 July 2003. But clause 6 does not stand alone; it has to be read with clause 5 and items 6 and 7 of the third schedule, as well, in the case of a renewal, as with clause 4. Accordingly, I must set out the relevant provisions of those clauses and items. Clause 4 contains an option of renewal in a fairly conventional form, to which has been added a proviso in the following terms:

PROVIDED ALWAYS THAT

“The Lessee hereby covenants with the Lessor as follows:-

(a) To pay the annual rent reserved at the times and in the manner set forth in item 6 of the Third Schedule and to pay all increases in rent determined under this Lease.”

“It is hereby expressly covenanted and declared that the annual rental hereby reserved shall be revised annually on and from the annual anniversary of this Lease until the end of the years as follows:-

(a) (i) As on the dates of review of rent specified in Item 7(a) of the Third Schedule hereto whenever occurring during the term hereof the review shall be calculated by multiplying the annual rent payable immediately prior to the review date by a fraction the numerator of which is the Index Number current as at the review date and the denominator of which is the Index Number current as at the review date immediately preceding the relevant review date (and in the case of the first review date the denominator shall be the Index Number current as at the date of commencement).

Whenever herein used the words “Index Number” shall mean the All Groups Consumer Price Index for Sydney published on the date to which it has last been calculated immediately prior to the relevant Rent review date (and in the case of the first review date the date of commencement) in the Australian Statistician Consumer Price Index publication and such applicable Index Number shall be deemed to be the Index Number as at such review date.

…

(b) At any time but not earlier than 120 days prior to each date specified in Item 7(b) of the Third Schedule hereto whenever occurring during the term hereof (each of which dates is hereinafter referred to as a “review date”) or at any time thereafter the Lessor may by notice in writing to the Lessee fix the annual rent (subject as herein provided) at an amount which in the opinion of the Lessor is the market rent of the Premises as at that review date and the amount so fixed shall be the annual rent payable by the Lessee as from that review date. Any receipt for the payment of rent due on or after a review date shall not prejudice the Lessor’s right to demand payment thereafter of any additional rent payable by the Lessee pursuant to the provisions of this clause. Without prejudice to the generality of this clause the Lessor shall not by reason of its failure to give notice of the rental which it proposes from the review date within any period whether specified herein or not forfeit its right to have the annual rent reviewed from the review date and the rate at which the annual rent is payable from the review date shall date back to and be payable from the review date.

[sic]

(d) The market rent determined as hereinbefore provided and payable by the Lessee as the annual rent after a review date or from the date of commencement of the renewed lease shall not in any circumstances be less than the amount payable by the Lessee for rent on an annual basis immediately prior thereto.

(e) If the Lessee considers the annual rent fixed by the Lessor pursuant to sub-clause (b) of this clause or clause 4 hereof not to be the current market rent of the Premises and gives to the Lessor a notice to that effect pursuant to sub-clause (c) for the annual rent to be determined in accordance with that sub-clause or if the Lessee fails to accept in writing within fourteen (14) days after being notified thereof that that annual rent so fixed by the Lessor is the current market rent of the Premises the Lessee shall if requested in writing by the Lessor from the review date in addition to continuing t[o] pay the monthly rent instalments at the rate applying immediately prior to the review date pay by equal monthly instalments in advance eighty (80) per centum of the increase in annual rent sought by the Lessor and fixed in its notice to the Lessee pursuant to sub-clause (b) hereof. Immediately following determination of the rent in accordance with sub-clause (c) hereof or the increased annual rent otherwise being agreed an appropriate adjustment and payment or repayment as the case may be shall forthwith be made between the Lessor and the Lessee to ensure that as from the review date the Lessee had paid and the lessor [sic] has received the appropriate amount in respect of the annual rent as agreed between the Lessor and the lessee [sic] or otherwise as determined in accordance with sub-clause (c) hereof.”

4 These provisions, of course, can only be applied by reference to the Third Schedule, items 6 and 7 of which provide:

ANNUAL RENT

The Lessee shall pay rent as follows:-

(a) ONE HUNDRED AND TEN THOUSAND FOUR HUNDRED DOLLARS ($110,400.00) per annum payable at the rate of NINE THOUSAND TWO HUNDRED DOLLARDS ($9,200.00) per month the first of such instalments to be made on the 21st day of July 1993 and thereafter on the 21st day of each succeeding month during the first two (2) years of the term hereof.

PROVIDED ALWAYS

(c) The annual rent for the fourth year of the term hereof shall be the same rental as the rental payable for the third year of the term hereof, the amount of which was established pursuant to clause (b) of Item 6 hereof.

(d) The annual rent for the fifth year of the term hereof shall be the annual rental calculated in accordance with sub-paragraph (a) of clause 6 hereof.

If the Lessee takes a renewed lease of the Premises pursuant to the option of renewal granted herein then the annual rent payable by the Lessee for the further term shall be as follows:-

(e) The annual rent payable for the first year of the further term hereof shall be the same annual rental which was payable for the fifth year of the initial term hereof.

(f) The annual rent for the second year of the further term hereof shall be the annual rental calculated in accordance with paragraph (b) of clause 6 hereof.

(g) The annual rent for the third, fourth and fifth year of the further term hereof shall be the annual rental calculated in accordance with paragraph (a) of clause 6 hereof.

DATES OF REVIEW OF RENT

(a) The fifth anniversary of the commencement date of this lease and during any renewal hereof on the third, fourth and fifth anniversary of the date of the renewed lease.

(b) On the third anniversary of the commencement date of this lease and during any renewal hereof on the second anniversary of the date of the renewed lease.”

5 What set the scene for the arguments about this aspect of the case, or at least what raised the curtain upon that scene, was the receipt by Mr Callaghan on or about 16 March 1999 of a letter of that date addressed “Mr Edward Callaghan, Wynyard Hotel, Pub Aus [sic] Pty Ltd“ and headed “RE: ANNUAL REVIEW OF RENT 107 CLARENCE STREET – SYDNEY”. The letter was in the following terms:

“I refer to our previous telephone conversations when we discussed the annual review of rental on the above property, which is due on 21 July 1999.

I note that I am yet to receive the trading figures of the Wynyard Hotel, as requested by me approximately a fortnight ago.

As you are aware, Clause 6(b) of your lease states as follows ‘… the lessee fix the annual rent at an amount which in the opinion of the lessor is the market rent of the premises as at that review date and the amount so fixed shall be the annual rent payable by the lessee as from that review date.’

Accordingly, from 21 July 1999 the rental of the above premises, as determined by us as the lessor, will increase to $260,000 pa. This calculates to $5,000 per week ($21,666.67 per month). This increase is in accordance with current market rentals of similar properties to that of the Wynyard Hotel.

Should you have any queries please do not hesitate to contact me.

Yours sincerely

FINANCIAL CONTROLLER

as at [the relevant] review date

6 There was some dispute at the hearing as to precisely what happened next, but there is no doubt that on 23 June 1999 a solicitor, Angela Frost, acting on behalf of the lessee, wrote to Jennifer Wilson, Financial Controller, Merivale CBD Pty Limited a letter in the following terms:

“I act for Edward Callaghan of Pub Oz Pty Ltd at the Wynyard Hotel.

Mr Callaghan has instructed me to advise you that the proposed rent increase is unacceptable and does not reflect the market value of the property.

It may be necessary to appoint a valuer as anticipated by the lease but in the meantime Mr Callaghan has requested a meeting with you in an attempt to resolve this matter.

Your reply as soon as possible would be appreciated.”

“As per your discussions with Mr John Hemmes we advise that as per Clause 6 of the lease, written notification disputing the rental increase must be made within 14 days of notification of the new rent.

Accordingly as from 21 July 1999 the new rental of the above property will increase to $21,666.67 per month.

…”

“Angela, it is too late for Pub Oz to object to the market rent review.”

7 From the time of these communications insisting that rent was due and must be paid in accordance with the purported determination under clause 6(b), and rejecting the availability of any further review under clause 6(c), Pub Oz Pty Limited paid the rent demanded, the subject of its review not being raised again until 27 February 2002 when Messrs Hunt & Hunt, who had by then been consulted by Pub Oz Pty Limited, wrote referring to the purported increase of rent on 21 July 1999 from $165,000 per annum to $260,000 per annum and the defendant’s assertion of 13 July 1999 that notification disputing the rental increase was required to be given within 14 days of the notification of the new rent. Messrs Hunt & Hunt pointed out that the lessor’s notice was clearly issued more than 120 days prior to the review date and stated “the notice was thus invalid”, even if 21 July 1999 was the correct review date. The letter also contended that the rent since 21 July 1999 had not reflected the true market value and had been paid “under the mistaken belief that the notice by Merivale was valid, and that the notice disputing the rental increase was technically given out of time”. It was following the defendant’s rejection of the propositions put by Messrs Hunt & Hunt that this proceeding was commenced. I should say at once that I accept the increased rent was indeed paid by reason of the mistake alleged and also a mistaken belief that it was too late under the lease to give a lessee’s notification pursuant to clause 6(c) once 14 days had expired from the date of the lessor’s notification. I reach this conclusion the more confidently since the verbal and written statements on behalf of the lessor were intended to induce just such beliefs in Mr Callaghan: cf Gould v Vaggelas (1985) 157 CLR 215 at 236; Como Investments Pty Ltd (In Liquidation) v Yenald Nominees Pty Ltd (1997) ATPR 43,617 at 43,619-43,620; and the authorities cited in the latter case. See also Kiriri Cotton Co Ltd v Dewani [1960] AC 192 at 204-205; David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353 at 384.

8 The first argument urged on this aspect of the case on behalf of the plaintiff is that, pursuant to item 7(b) of the third schedule to the lease, the relevant review date was not 21 July 1999 but one year later, ie. 21 July 2000. This, the submission ran, was the date identified by the opening words of clause 6(b) of the lease permitting service of a notice fixing the rent at any time “but not earlier than 120 days prior to each date specified in Item 7(b) of the Third Schedule”. The only date specified in item 7(b), during the currency of any renewal of the lease, is “the second anniversary of the date of the renewed lease”. In the ordinary use of the English language, an “anniversary” of a date or event is “the date on which [the] event took place in a previous year”: The New Oxford Dictionary of English (1998). Thus, the lease having been renewed on 21 July 1998, the first anniversary of its date was 21 July 1999 and the second anniversary of its date was 21 July 2000. This is how Lambert JA (with whom Anderson JA agreed) understood the word “anniversary” in the context of the term of a lease, while pointing out that “[a]n anniversary is associated precisely with a period of one year, usually in the sense of a recurring one-year interval”, in Peking Palace Ltd (Tang’s Restaurant) v Trizec Construction Limited (1987) 20 BCLR (2d) 161 at 164. That decision was cited together with Duchow v New York State Teamsters Conference Pension and Retirement Fund (1982) 691 F 2d 74 at 79 in Save Our Suburbs (SOS) NSW Incorporated v Electoral Commissioner of New South Wales (2002) 55 NSWLR 642 at 656 where the “first anniversary” of the registration of a political party was accepted as being the date one year later than the date of its registration. But the trouble with counsel’s argument, as applied to this lease, is that it would introduce both contradictions and absurdities into the construction of the document. Clause 6 of the lease commences by providing that “the annual rental hereby reserved shall be revised annually on and from the annual anniversary of this Lease until the end of the years”, and then provides, in paragraphs (a) and (b), that the dates of review shall be those specified in item 7(a) and item 7(b) of the Third Schedule. But the covenant to pay rent in clause 5 requires it to be paid “at the times and in the manner set forth in item 6 of the Third Schedule”, to which also the proviso in respect of a renewal makes special reference in clause 4. Item 6, in separate paragraphs, details the rent payable year by year, specifying each year during which a revised rental will apply and whether that revision will be a revision referred to in item 7(a) or item 7(b). It will be appreciated that the difference between item 7(a) and item 7(b) is the difference between a review in accordance with clause 6(a) of the lease and a review in accordance with clause 6(b) of the lease (it is necessary to note at this point that both clause 6 of the lease and item 6 of the Third Schedule, rather confusingly, have a number of paragraphs, lettered (a) to (e) in clause 6, and (a) to (g) in item 6 – the reader needs to take care to avoid mistaking a paragraph of item 6 for a paragraph of clause 6). When, then, attention is paid to the terms of item 6 of the third schedule, it becomes apparent that the first review under clause 6(a) of the lease will establish the rent for the fifth year of the original term of the lease (see item 6(d)), and the next review of this kind will establish the rent for the third year, followed by the fourth and fifth years, of a further term of five years in a case where the option of renewal has been exercised (see item 6(g)). Similarly, reviews under clause 6(b) of the lease will establish the rent payable “during the third year of the term” of the original lease (see item 6(b)) and “for the second year of [a] further term” (see item 6(f)). Plainly, when each of the years referred to in item 6 is matched with the provisions of item 7, in every case, the “anniversary”, if the word is used in accordance with its ordinary meaning, referred to in item 7 must be one year later than the date of the commencement of the year during which the reviewed rent is to be payable! But there will be no difficulty if the writer thought of the date of the lease, and also of the date of the renewed lease, as being the first anniversary of each document, so that what in normal parlance would be the first anniversary would, in his use of language, be the second. On any other basis, item 6 and item 7 are in direct conflict, and item 7 would involve an absurdity insofar as a rent would be payable for a period of a year, during each year to which the item applies, but would not be fixed until the end of that year. A further absurdity would be involved in the fifth year insofar as the lease would provide for a procedure being undertaken to establish a rental at a time when the lease had expired.

9 It is an outdated approach to interpretation which, in such a case as this, would pedantically insist upon the dictionary meaning of the word “anniversary” in defiance of the context: see Short v F W Hercus Pty Limited (1993) 40 FCR 511 at 517-520. The modern approach also enables the Court to go beyond moulding the choice of words or syntax involved in the drafting of the document (see Fitzgerald v Masters (1956) 95 CLR 420 at 426-427) so as to correct errors, even if their nature may not be precisely identifiable, which may have caused the document to be “lacking in commercial common sense”: Dockside Holdings Pty Ltd v Rakio Pty Ltd (2001) 79 SASR 374 at 378, per Williams J, with whom Olsson and Duggan JJ agreed. Dockside Holdings is an interesting example of a case where the Court felt able, not merely to read a word, in the light of its context, in a special sense, but actually to reformulate a provision in order to make it accord with the sense the Court inferred to have been intended. Williams J placed particular reliance on Westpac Banking Corporation v Tanzone Pty Ltd (2000) 9 BPR 17521; Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749; and Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896. Although the nature of the error was more complicated in Dockside Holdings than the error which I infer occurred here, the summary statement of the problem by Williams J at 386 would be equally applicable to that with which I have to deal. His Honour said:

“The difficulty in the present case is that words have not been used in a natural and ordinary way.”

Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd

“I propose to begin by examining the way we interpret utterances in everyday life. It is a matter of constant experience that people can convey their meaning unambiguously although they have used the wrong words. We start with an assumption that people will use words and grammar in a conventional way but quite often it becomes obvious that, for one reason or another, they are not doing so and we adjust our interpretation of what they are saying accordingly. We do so in order to make sense of their utterance: so that the different parts of the sentence fit together in a coherent way and also to enable the sentence to fit the background of facts which plays an indispensable part in the way we interpret what anyone is saying. No one, for example, has any difficulty in understanding Mrs. Malaprop. When she says ‘She is as obstinate as an allegory on banks of the Nile,’ we reject the conventional or literal meaning of allegory as making nonsense of the sentence and substitute ‘alligator’ by using our background knowledge of the things likely to be found on the banks of the Nile and choosing one which sounds rather like ‘allegory.’

Mrs Malaprop’s problem was an imperfect understanding of the conventional meanings of English words. But the reason for the mistake does not really matter. We use the same process of adjustment when people have made mistakes about names or descriptions or days or times because they have forgotten or become mixed up. If one meets an acquaintance and he says ‘And how is Mary?’ it may be obvious that he is referring to one’s wife, even if she is in fact called Jane. One may even, to avoid embarrassment, answer ‘Very well, thank you’ without drawing attention to his mistake. The message has been unambiguously received and understood.”

“In determining the meaning of the language of a commercial contract, and unilateral contractual notices, the law therefore generally favours a commercially sensible construction. The reason for this approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would construe them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language.”

Investors Compensation Scheme Ltd v West Bromwich Building Society

Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd

The ‘rule ‘ that words should be given their ‘natural and ordinary meaning’ reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had.”

10 Applying these statements of the law to the interpretation of the lease in question, I reach the clear conclusion that the word “anniversary” has been used in this lease to refer to the day of the date of the lease, not only in each recurring year, but also in the very year in which it was executed, so that its first anniversary, understood in accordance with the way this document has been drafted, was the date of its execution and its second anniversary was the corresponding date in the next year. But so to decide is not to solve the problem set by the plaintiff’s case. Even if the second anniversary of the renewed lease must be taken to have been 21 July 1999, the notice which lit the fuse to the present dispute was given one week before the earliest date that would accord with clause 6(b) of the lease. In Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd at 773, Lord Hoffmann said of a notice given pursuant to a clause in a lease permitting a significant change in the term of the lease to be effected by the service of a notice to a particular effect, that “such notices, operating, as they do, unilaterally to alter the rights of the parties, must comply strictly with the terms of the lease.” Here, the notice that was relied on by the defendant to alter radically the rights of the parties (almost doubling the rent) did not so comply.

11 At this point, an unusual irony must envelop the discussion. For the defendant, which had insisted upon its right to a strict compliance by the company Pub Oz Pty Limited with a time requirement of clause 6(c), itself relied, in respect of the temporal provision of clause 6(b), on the proposition that time was not of the essence of the contract. This, of course, was in the teeth of Lord Hoffmann’s dictum.

12 For a number of years, the Court’s task in interpreting rent review clauses was somewhat like trying to navigate a boat through unfamiliar waters by the aid of several entirely inconsistent charts. But, more recently, appellate authority in Australia and in the English Privy Council has delineated the course. The starting point is the decision of the House of the Lords in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 where it was held (to use the words of Lord Diplock at 930) that “in the absence of any contra-indications in the express words of the lease or in the interrelation of the rent review clause itself and other clauses or in the surrounding circumstances the presumption is that the time-table specified in a rent review clause for completion of the various steps for determining the rent payable in respect of the period following the review date is not of the essence of the contract”. The terms of this statement obviously accord great weight to the individual provisions of a particular contract, as indeed, where the question is as to the meaning and effect of a contract, would be inevitable. In Gollin & Company Limited v Karenlee Nominees Proprietary Limited (1983) 153 CLR 455 at 468 Mason, Murphy, Brennan, Deane and Dawson JJ, in their joint judgment, expressed acceptance of the broad proposition stated in United Scientific Holdings Ltd v Burnley Borough Council. It was not the broad proposition, but its application to particular circumstances, which created difficulties and led to quite inconsistent decisions. Many of these decisions came up for consideration in G R Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80, a decision of the Court of Appeal (Gleeson CJ, Samuels and Meagher JJA). The rent review provisions there in question are set out in the judgment of Gleeson CJ at 83-85. For present purposes, it may be noted that they included a provision (paragraph 2.02 (a)) enabling the lessor “[w]ithin sixty (60) days prior to the expiration of each period … [to] give notice in writing … to the Lessee increasing the yearly rental to an amount which the Lessor considers will be the current market rent … “; a provision (paragraph 2.02 (b)) that “[p]rior to the expiration of fourteen (14) days from the service of any such notice from the Lessor, the Lessee may, by notice in writing to the Lessor, dispute that the amount set out in the notice … is the current market rent and … shall nominate [a valuer]”; a provision (paragraph 2.02 (d)) that “[i]n the event that the Lessee does not serve notice of dispute on the Lessor within the time prescribed … the Lessee shall be deemed to have agreed that the amount set out in the notice [of the Lessor] … is the current market rent”; and a provision that if the lessor “shall fail to give notice within the period of sixty (60) days referred to [in the first provision], the Lessor may nevertheless give such notice at any time during the ensuing Review Period” whereupon the review date shall be the day following the giving of the notice. A lessor’s notice was duly given, but the lessee failed to serve a lessee’s notice until after the expiry of the period of 14 days. In separate judgments, in which the cases are examined in some detail, all members of the Court came to the conclusion that United Scientific Holdings Ltd v Burnley Borough Council did not enable the express provision of paragraph (d) to be overridden. As Gleeson CJ put it (at 90):

“Although I do not find this an easy matter, because I regard the commercial considerations invoked by the House of Lords to be weighty, I am unable to accept that they can be taken to the length of entitling a Court to disregard, or fail to give effect to, the language of an express stipulation such as that contained in art 2.02 (d). It is one thing to treat a stipulation as to time as directory rather than mandatory. It is, however, another thing to treat a contractual provision which spells out the agreed consequence of failing to do something within a particular time as not meaning what it says.”

Mecca Leisure Ltd v Renown Investments (Holdings) Ltd

“Hitherto, the doctrine (of time not being of the essence) has only operated so as to allow one party to perform obligations laid down in the contract at a later date; it has never operated so as to alter the substantive terms of the contract entered into between the parties, other than the terms as to time.”

United Scientific

“Once a contract expressly spells out the consequences of non-compliance with a time-limit I cannot see how it can be argued that the time-limit is non essential.”

“It would not entail the consequence that the tenant’s notice of 6 February was valid, nor would it entail the consequence that the tenant could rely on cl 2.02(b). That is because cl 2.02(b) says that such a right can only be exercised within 14 days of service of a cl 2.02(a) notice. … In my view, no decision can legitimately be made that a time provision in a rent review clause is not of the essence if such a decision would involve an alteration in the contract entered into between the parties.”

13 Whatever else may be said about Mailman, it is clear that the Court of Appeal insisted upon the primacy of the contract itself – a point the House of Lords in terms acknowledged. If the provisions of the contract necessarily imply the essentiality of time in some respect, then that essentiality has to be acknowledged. This point was taken up by Barker J in Mobil Oil New Zealand Ltd v Mandeno [1995] 3 NZLR 114 at 117, when he said:

“The cases show the essential point is whether time of the essence was intended as a matter of construction.”

Mailman

Mecca

Mailman

Mecca

14 The decision in Mobil Oil New Zealand Ltd v Mandeno was cited to the Privy Council (Lord Browne-Wilkinson, Lord Cooke of Thorndon, Lord Clyde, Lord Hobhouse of Woodborough and Henry J) in W & R Jack Ltd v Fifield [2000] 3 NZLR 129 where, in reasons delivered by Lord Hobhouse of Woodborough, their Lordships considered a set of clauses providing for service of a landlord’s notice specifying a new annual rent proposed by the landlord; for a notice by the tenant within 28 days of receipt of the landlord’s notice disputing that the proposed new rent was the current market rent and requiring arbitration; and that upon the tenant’s failure to give notice he should be deemed to have accepted a new annual rent specified in the landlord’s notice. Lord Hobhouse said (at 133):

Mobil Oil New Zealand Ltd v Mandeno

Charles Rickards Ld v Oppenheim

Mobil Oil New Zealand Ltd v Mandeno

Mailman

Mobil Oil New Zealand Ltd v Mandeno

Mailman

15 What these authorities establish is that rent review clauses are dichotomous in nature. On the one hand, some rent review clauses may be seen as simply establishing a machinery of review, or a series of steps to be taken to enable a review to be carried out. On the other hand, other rent review provisions may declare the consequences of default in the taking of some step, or may express the necessity to take the step, in terms which make it clear that more than machinery is involved and contractual rights and obligations may depend upon strict and timely compliance with the procedure laid down. In the former case, the whole procedure may be merely directory and a particular non-compliance may have no serious effect upon rights or obligations; in the latter case, the procedure is mandatory and time is essential, whether or not it is expressly stated to be so. Although the House of Lords gave voice in United Scientific Holdings Ltd v Burnley Borough Council to an inclination to construe rent review clauses in the former sense, they also made it clear that the language of the lease, the way its provisions operate in connection with each other and other aspects of context may well lead to a different conclusion. In subsequent cases, it has been pointed out that the contrast between lenity in one respect and strictness in another of the provisions of the lease may emphasise that the strict provisions are intended to mean what they say.

16 As I have remarked, the present case presents the unusual feature that, although the lessor has insisted upon strict compliance by the lessee, it has never itself complied with the first requirement laid down in the lease as the ground of the lessee’s obligation. To adapt the metaphor of Meagher JA in Mailman, (at 99), the lessor took the first step in the “stately saraband” for which the lease provided out of time with the music, and the question is did the contractual dance ever begin?

17 The answer to this question is not to be obtained by a solemn intoning of the words of Lord Diplock in United Scientific Holdings Ltd v Burnley Borough Council. It is necessary to refer to the terms of the lease. The language of clause 6(b) does not suggest that the time limitation contained in it is unimportant machinery. It begins with the words:

“At any time but not earlier than 120 days prior to each date specified … or at any time thereafter the Lessor may by notice in writing to the Lessee fix the annual rent (subject as herein provided) … and the amount so fixed shall be the annual rent payable by the Lessee …”

Mailman

Mobil Oil New Zealand Ltd v Mandeno

forfeiture

18 In my opinion, the provisions of clause 6 of the lease do not give any contractual effect to a purported notice by the lessor pursuant to clause 6(b) which is served earlier than the time specified by the lease. The same conclusion would, of course, follow if the question were considered as one of the operation of a condition precedent, but as Samuels JA made clear in Mailman (at 94-95), it is difficult to reconcile the principles applicable to a condition precedent with the law as it has been laid down in United Scientific Holdings Ltd v Burnley Borough Council. To adapt the language of Brennan J (with whom Stephen J agreed) in Perri v Coolangatta Investments Proprietary Limited (1982) 149 CLR 537 at 570 (and see also per Gibbs CJ at 545), if clause 6(b) is seen as establishing a condition, the failure of the lessor to comply with that condition affected the formation of the relevant obligation asserted against the lessee. However, to the extent that United Scientific Holdings Ltd v Burnley Borough Council holds sway, a rent review clause cannot simply be analysed by a Judge at first instance in terms of the law of contractual conditions. Nevertheless, where the lease exhibits a contrast between strict and lenient provisions, and the strict provision (as here) is expressed as a condition precedent to the imposition unilaterally of an obligation upon the other party, the principle enunciated by Lord Hoffmann, which I have cited earlier, requiring strict compliance by the lessor with the terms of the lease, cannot be left out of account in relation to the question whether the time limitation must be observed.

19 There remains, in respect of this aspect of the case, the question whether, although clause 6 of the lease requires strict compliance in the case of a lessor’s notice with the limitation upon the time before which it may not be served, time should be treated in other respects as not essential. Had the lessor, by notice in writing given not earlier than the requisite time, validly fixed the annual rent under clause 6 (b), “subject as herein provided”, i.e. subject to paragraphs (c), (d) and (e), would the lessee have been strictly bound by the time limit of fourteen days expressed in paragraph (c)? When this question is asked, it is important to notice that the lease in the present case contains no such provision as article 2.02 (d) of the lease in Mailman, by which a consequence of a failure by the lessee to “serve notice of dispute on the Lessor within the time prescribed in paragraph (b)” was specified as being that “the Lessee [was] deemed to have agreed that the amount set out in the [lessor’s] notice… is the current market rent of the Demised Premises at the Review Date and for the following Review Period”. That provision was mirrored in closely similar terms in Mobil Oil New Zealand Ltd v Mandeno and in W & R Jack Ltd v Fifield, and in all of these cases provided a strong ground for distinguishing each of them from United Scientific Holdings Ltd v Burnley Borough Council. In the absence of such a term of the contract, a provision enabling the lessee, by the service of a counter-notice within a stated period, to set in train an arbitration or expert determination of the issue of the market rent looks very much like a provision that “lays down the administrative procedure or machinery by which the fair market rent shall be ascertained”, to use the language of Lord Salmon in United Scientific Holdings Ltd v Burnley Borough Council at 948. In my opinion, what Lord Diplock called (in the same case at 930) “the presumption…that the time-table specified in a rent review clause for completion of the various steps for determining the rent payable in respect of the period following the review date is not of the essence of the contract” should prevail so far as the construction of clause 6 (c) is concerned. Indeed, the language of paragraph (e), which allows in broad terms for the settlement of the question raised by a landlord’s notice under clause 6 (b) by “the increased annual rent otherwise being agreed” and for the payment of 80 per cent of the increase in the rent fixed by the landlord’s notice, not only where the lessee has given a counter-notice pursuant to clause 6 (c), but also “if the Lessee fails to accept in writing within fourteen (14) days after being notified thereof that that annual rent so fixed by the Lessor is the current market rent of the Premises”, is consistent with the view that the strict essentiality of time is not insisted upon in this respect by the terms of this lease.

20 It follows that the defendant was in error, not only in asserting the effectiveness of a notice under clause 6 (b) that did not comply with the time limitation expressed in that provision, but also in denying the right of the lessee, under the terms of this lease, to activate the machinery of clause 6 (c) after the expiry of fourteen days from notification of an annual rent fixed by the lessor under clause 6 (b).

21 In the circumstances, I need not examine in detail the plaintiff’s alternative argument that the defendant did not comply with clause 6 (b) because it did not by its notice “fix the annual rent…at an amount which in the opinion of the lessor [was] the market rent of the Premises as at [the] review date”. No doubt a clause committing such a power to one party to a contract requires that power to be exercised genuinely and in good faith. In the present case, the amount inserted in the lessor’s notice was decided by Mr Hemmes. He gave evidence and was cross-examined. I am satisfied, upon a consideration of the whole of his evidence and having regard to other evidence (such as that of the licensee and manager of the CBD Hotel about other hotels allegedly considered for purposes of comparison), that Mr Hemmes made no serious attempt to assess the market rent of the leased premises as at the review date, but chose a figure upon which he had determined long before as being the amount he wanted. In evidence, he relied upon comparisons with various other premises, but these comparisons were quite unconvincing and wore the strong appearance of being afterthoughts. However, it is unnecessary to pursue the point.

22 The defendant, in answer to the plaintiff’s case, says that Pub Oz Pty Limited, by virtue of the terms of the letter of 23 June 1999 set out earlier in these reasons, waived compliance by the defendant with the time stipulation in clause 6 (b) of the lease. This argument seems to me to be difficult to reconcile with the language of the letter. Having bluntly declared that “the proposed rent increase is unacceptable and does not reflect the market value of the property”, the writer goes on to state:

“It may be necessary to appoint a valuer as anticipated by the lease but in the meantime Mr Callaghan has requested a meeting with you in an attempt to resolve this matter.”

Charles Rickards Ld v Oppenheim

W & R Jack Ltd v Fifield

“If the defendant, as he did, led the plaintiffs to believe that he would not insist on the stipulation as to time, and that, if they carried out the work, he would accept it, and they did it, he could not afterwards set up the stipulation as to the time against them. Whether it be called waiver or forbearance on his part, or an agreed variation or substituted performance, does not matter. It is a kind of a estoppel. By his conduct he evinced an intention to affect their legal relations. He made, in effect, a promise not to insist on his strict legal rights. That promise was intended to be acted on, and was in fact acted on. He cannot afterwards go back on it.”

23 As these remarks of Denning LJ illustrate, a waiver is not always easy to grasp. It may take different forms. But, for present purposes, a waiver may be founded either upon estoppel or upon election. When the chameleon wears the colours of estoppel, it requires reliance by the other party (here, the defendant) so as to make it unconscientious of the party waiving to insist further upon the right in question. When waiver appears in the guise of election, a conscious choice between known rights is required, or at least conduct definitely inconsistent with the continued assertion of the right waived. The nature of a waiver of a contractual right founded upon estoppel is explained in the passage I have cited from Charles Richards Ld v Oppenheim. What waiver as a species of election involves is stated in Craine v The Colonial Mutual Fire Insurance Company Limited (1926) 28 CLR 305 at 326 where Isaacs J, delivering the judgment of the Court (Knox CJ, Isaacs and Starke JJ), said that “waiver must be an intentional act with knowledge”, the question being whether the party has approbated so as not to be able to reprobate – “whether he has elected to get some advantage to which he would not otherwise have been entitled, so as to deny to him a later election to the contrary …. His knowledge is necessary, or he cannot be said to have approbated or elected.” This view of the law was accepted in George v Roach (1942) 67 CLR 253 at 262 by Rich J who insisted upon “intention and knowledge of all the relevant circumstances”, and in Deaves v CML Fire and General Insurance Company Limited (1979) 143 CLR 24 at 42 by Gibbs CJ (with whom Stephen J relevantly agreed).

24 In neither the sense of estoppel, nor in that of election, can waiver assist the defendant. Far from changing its position in reliance on the letter of 23 June 1999, the defendant rejected any course suggested by that letter out of hand, so there is no estoppel. As for election, not only is it clear Pub Oz Pty Limited did not have the necessary intention and knowledge, but the remarks of Lord Wilberforce in Johnson v Agnew [1980] AC 367 at 398 are very much in point. His Lordship said:

“Election, though the subject of much learning and refinement, is in the end a doctrine based on simple considerations of common sense and equity. It is easy to see that a party who has chosen to put an end to a contract by accepting the other party’s repudiation cannot afterwards seek specific performance. This is simply because the contract has gone – what is dead is dead. But it is no more difficult to agree that a party, who has chosen to seek specific performance, may quite well thereafter, if specific performance fails to be realised, say, ‘Very well, then, the contract should be regarded as terminated.’ It is quite consistent with a decision provisionally to keep alive, to say, ‘Well, this is no use – let us now end the contract’s life.’ A vendor who seeks (and gets) specific performance is merely electing for a course which may or may not lead to implementation of the contract – what he elects for is not eternal and unconditional affirmation, but a continuance of the contract under control of the court which control involves the power, in certain events, to terminate it.”

25 Next, the defendant pleaded that an agreement to pay the increased rent should be inferred from the conduct of Pub Oz Pty Limited in paying the rent demanded by the defendant, so that the defendant had no liability in respect of overpaid rent. Reliance was placed on the principle laid down by McHugh JA (with whom Samuels JA agreed) in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 535:

“’[W]here an offeree with a reasonable opportunity to reject an offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms. …

The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted.”

26 The defendant urged in support of its contention the later decisions in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 and 33 Bank Street Nominees Pty Ltd v Citipower Pty (1997) BC 9702794, a judgment of Beach J. In the former case, Ipp AJA (at 197) referred to the passage in the judgment of McHugh JA in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd, to which I have referred, in holding that an offer in respect of the fees for certain waste disposal operations had been accepted by conduct when those fees had been charged. In the latter case, Beach J inferred, “[i]n the absence of any other evidentiary material shedding light upon the matter”, from the payment of rental over a period of three years, an agreement by a lessor not to apply a rent review clause. But, as I have made clear, there is not such an absence of evidence here. Here, as in Gollin & Company Limited v Karenlee Nominees Proprietary Limited (at 465-469), there is evidence to elucidate the circumstances in which the payments were made, and I find it does not indicate the alleged agreement, or any waiver of the lessee’s rights.

27 What the circumstances do indicate, rather than an agreement to accept the rent fixed by the lessor, is a misrepresentation (doubtless innocent), made on its behalf, that in the events that had happened the rent had been effectively fixed at the revised figure which could not be reconsidered under clause 6(c). The payments of the increased amounts made in consequence by the lessee were made under a mistake induced by that misrepresentation, and are recoverable. Shorn of the complications of the restrictive legislation there in question, the case is analogous to Solle v Butcher [1950] 1 KB 671, where Denning LJ said (at 695):

“It seems to me that the plaintiff was not merely expressing an opinion on the law: he was making an unambiguous statement as to private rights, and a misrepresentation as to private rights is equivalent to a misrepresentation of fact for this purpose … But it is unnecessary to come to a firm conclusion on this point, because, as Bucknill LJ has said [at 684 et seq], there was clearly a common mistake, or, as I would prefer to describe it, a common misapprehension, which was fundamental and in no way due to any fault of the defendant …”

David Securities Pty Limited v Commonwealth Bank of Australia

Kiriri Cotton Co Ltd v Dewani

Solle v Butcher

28 The principle with respect to the recovery of money paid under a mistake of law was stated in the joint judgment of Mason CJ, Deane, Toohey, Gaudron and McHugh JJ in David Securities Pty Limited v Commonwealth Bank of Australia at 378 in the following terms:

“[T]he payer will be entitled prima facie to recover moneys paid under a mistake if it appears that the moneys were paid by the payer in the mistaken belief that he or she was under a legal obligation to pay the moneys or that the payee was legally entitled to payment of the moneys. Such a mistake would be causative of the payment.”

Commissioner of State Revenue (Victoria) v Royal Insurance Australia Limited

David Securities

“And, prima facie, that is all that is required where, as here, the recipient has no legal entitlement to receive or retain the moneys. The recipient has been unjustly enriched. Indeed, it is perhaps possible that the absence of any legitimate basis for retention of the money by the Commissioner might itself ground a claim for unjust enrichment without the need to show any causative mistake on the part of Royal. But there is no occasion to pursue this aspect of the case further.”

Roxborough v Rothmans of Pall Mall Australia Limited

British American Tobacco Australia Ltd

v The State of Western Australia

29 It cannot be said that any of the payments of amounts exceeding the rent that was due caused the defendant to refrain from taking the appropriate steps to increase the rent, so as to raise some equity in its favour. That would be to reverse the current of causation that actually flowed, for the payments were made because of the defendant’s own insistence that everything necessary to impose an obligation to make them had already occurred. In any case, the claim of Pub Oz Pty Limited that the whole procedure was not in accordance with the legal rights of the parties was made before the end of the lease, and so before it could be said to be too late for the defendant to invoke the proper procedure (it will be recalled that clause 6(b) remained available, while the lease was in force, “at any time thereafter”). That the defendant did not respond to the claim by taking any step under clause 6(b) is powerful evidence in favour of the view that it knew an expert determination under clause 6(c) would not justify its retention of at least a large part of the payments, and I do not find that any part has been shown to be an amount it would, had the proper steps been taken, have been entitled to retain. On that issue, the onus is on the defendant: David SecuritiesPty Limited v Commonwealth Bank of Australia at 384.

30 Counsel for the defendant raised the contention that clause 6(e) of the lease provided a defence to the extent of 80 per centum of the overpayments made. But it seems to me there are several answers to this proposition. In the first place, clause 6 (e) is an interim provision to operate pending resolution of the question whether the amount “fixed by the Lessor pursuant to sub-clause (b) … or clause 4” is to be varied. I have already held that the purported notice under clause 6(b) was not valid, so it must follow that clause 6(e) never became available. Secondly, assuming a valid notice under clause 6(b), clause 6(e) looks to the giving by the lessee of a notice under clause 6 (c) or the lessee’s failure to accept in writing within 14 days after being notified thereof that the “annual rent so fixed by the Lessor [ie in a valid notice under clause 6(b)] is the current market rent”. In either case, clause 6(e) then requires the further step expressed by the words “the Lessee shall if requested in writing by the Lessor from the review date in addition to continuing to pay the monthly rent instalments at the rate applying immediately prior to the review date pay by equal monthly instalments in advance eighty (80) per centum of the increase in annual rent sought by the Lessor and fixed in its notice to the Lessee pursuant to sub-clause (b)”. The lessor, which absolutely refused to recognise that the lessee had given or could give a notice under clause 6(c) has never been in a position to avail itself of this provision, and in fact no request in writing to make the payments specified in clause 6(e) has ever been made. Finally, clause 6(e) contemplates either a “determination of the rent in accordance with sub-clause (c)” or alternatively “the increased annual rent otherwise being agreed”, whereupon the interim measure provided for by clause 6(e) would resolve into an “appropriate adjustment and payment or repayment as the case may be” which “shall forthwith be made between the Lessor and the Lessee to ensure that as from the review date the Lessee had paid and the lessor has received the appropriate amount in respect of the annual rent as agreed between the Lessor and the lessee or otherwise as determined in accordance with sub-clause (c)”. Plainly, this part of the clause has also never been applicable, as there has never been any contemplation by the lessor of either a determination under clause 6(c) or any such agreement as clause 6(e) envisages. I reject the contention that now, long after the lease has been terminated, the defendant can avail itself in any way of clause 6(e).

31 For these reasons, at the time Pub Oz Pty Limited went into liquidation it was entitled to recover the overpayments of rent together with interest thereon but the plaintiff, in consideration of a payment of $10,000 plus $1,000 goods and services tax totalling $11,000, took an assignment from the liquidators and was substituted for the company as plaintiff. The liquidators duly gave notice in writing to the defendant of the assignment on 23 June 2003. There was some dispute about the effectiveness of this assignment, but I do not see any reason to doubt that it was, at least, a good assignment in equity. If so, the company as legal owner having gone out of existence, there is no reason why the equitable assignee should not “prosecute the action to finality and obtain a judgment without joining the assignor as a party”: Weddell v Pearce [1988] 1 Ch 26 at 43; Jennings v Credit Corp Australia Pty Ltd (2000) 48 NSWLR 709 at 719-722. In any event, in order to make doubly sure, the plaintiff has since taken a further assignment, in reliance on s 601AD of the Corporations Act, from the Australian Securities and Investments Commission. In my opinion, the plaintiff is entitled to succeed in his action. The parties have calculated the overpaid rent, with adjustments for indexation, at $383,967.36 on which interest is to be allowed at the appropriate rates, the amount of interest being $145,655.09 as at 11 August 2005.

32 That leaves the cross claim to be considered.

33 The cross claim is pleaded in reliance on three particular clauses of the lease which are set out below:

“7. The Lessee takes subject to the full effect of the covenants next hereinafter shortly noted as the same are set forth in words at length in the second column of Part 2 of the Fourth Schedule to the Conveyancing Act, 1919:-

…

(4) And to maintain and leave the premises in good repair (having regard to their condition at the commencement of the lease), reasonable wear and tear, war damage, and damage by fire, lightning, flood and tempest excepted;”

(The “words at length in the … Fourth Schedule to the Conveyancing Act” referred to in this clause are:

“And also that the lessee will during the term, when, where, and so often as the need shall be, but having regard to the condition of the demised premises at the commencement of the lease and excepting reasonable wear and tear, war damage, and damage by fire, lightning, flood and tempest, occurring within the term -

(a) well and sufficiently maintain, amend, and keep, and

(b) at the expiration or sooner determination of the term peaceably surrender and yield up unto the lessor,

in good and substantial repair the demised premises, including all appurtenances, buildings, erections and fixtures belonging to the demised premises, or at any time within the term lawfully made or erected by the lessor upon or within the demised premises.”)

“24. (c) The lessee does hereby covenant with the lessor:-

(i) At all times during the continuance of this lease to keep the fittings plant and chattels now and from time to time on the said premises in a proper state of repair working order and condition and will replace the same or such part or parts or items thereof as shall become broken worn out destroyed damaged or obsolete with fittings plant and chattels of a like nature and equal value so that the same are in a proper state of repair working order and condition at the expiration or sooner determination of this lease or any extension or renewal of it.”

“25. (a) The lessee hereby acknowledges that the fixtures, fittings and equipment as listed in Annexure ‘A’ hereto belong to and are the property of the Lessor.

Sic

34 Perusal of these clauses reveals that clause 7 is concerned with the repair of the premises, including the appurtenances and fixtures belonging to them, “having regard to the condition of the demised premises at the commencement of the lease and excepting reasonable wear and tear.” Because the measure of the obligation imposed by this covenant is the condition of the demised premises at the commencement of the lease, it may be important to know when that time was. In the present case, it will be recalled, Pub Oz Pty Limited only purchased the business of the hotel as the original term of the lease was drawing to a close; indeed, it was on the very same day that the option of renewal was exercised, an option only exercisable pursuant to clause 4 of the lease “if the Lessee shall not then be in breach of any of the covenants and agreements by and on the part of the Lessee contained in this lease”. It was not suggested the lessee was so in breach and a renewed lease was entered into. It was the renewed lease which then governed the relationship between the lessor and the lessee and clause 7 of that lease, when it referred to “the commencement of the lease”, could hardly mean anything but the date 21 July 1998 when the lease commenced: Halsbury’s Laws of Australia vol 16 (1997) 245-3610; Gerraty v McGavin (1914) 18 CLR 152 at 163, where Isaacs J said:

“Now, what is the position of a lease obtained by the exercise of an option to renew? Clearly it is a new lease, a new demise.”

35 A further matter should be noted about clause 7. Counsel for the cross-claimant referred me to Lurcott v Wakely & Wheeler [1911] 1 KB 905, an authoritative decision as to the effect of covenants to repair. In that case, Fletcher Moulton LJ said (at 919):

“[I]t is settled law that when a man undertakes to keep a thing in good condition or in thorough repair, and it is not in that condition when the demise commences, the covenant implies that he is to put it in that state as well as to keep it in that state.”

“For my own part, when the word ‘repair’ is applied to a complex matter like a house, I have no doubt that the repair includes the replacement of parts. Of course, if a house had tumbled down, or was down, the word ‘repair’ could not be used to cover rebuilding. It would not be apt to describe such an operation.”

“Therefore you have from time to time as things need repair to put new for old.”

(q) 12 non-functioning television sets

“Probably, yes.”

some

He, too, explained that some of them worked but had problems with reception, in relation to which he did not know whether the central aerial was adequate or operable.

When it is suggested, in the face of this evidence, that the change to larger and new television sets was dictated by poor maintenance of the small old sets previously in the rooms, the obvious alternative explanation is that Mr Hemmes, long before he effected the eviction of Pub Oz Pty Limited, intended to “change everything when we take it over” as he put it in cross-examination in his own words. No evidence was presented as to the cost of reconditioned television sets of the size of those previously in the premises. In my opinion, the most likely explanation of that is that it would not have suited Mr Hemmes’s plan for change to have had sets of that kind in the hotel, although they could have been obtained for a very small expenditure, especially as about half of the sets would not have actually required replacement.

(r) Damaged and non-functioning air-conditioners

Under this heading, the cross-claimant claims a total of $6,473 made up of four amounts, as follows:

sic

This quotation appears to be linked with a payment advice bearing the date 7 October 2003 forwarding a cheque dated 28 October 2003 for $5,230.50 to Biggs Air Conditioning. Deducting goods and services tax from $5,230.50, one arrives at the figure claimed of $4,755, but this of course is substantially more than the quotation which, deducting goods and services tax, was for $4,050. The bareness of the quotation and the absence of any detailed invoice are also peculiar features, especially in the presence of the statement about lack of maintenance which is not linked to any discussion of the economics of repair, or the nature of the problem, or whether that problem had developed during the four months since the eviction of Pub Oz Pty Limited. If it was intended as an expression of expert opinion, it was of course far from compliance with the rules governing that means of proof.

“A/C not working due to blown fuses in condensor. Replaced fuses and tested operation to find all OK.”

It does not seem to me that this invoice proves anything against the cross-defendant.

“Checked a/c unit to find system complete block of ice. Switched system onto defrost cycle to melt the ice cleaned filters tested operation to find all ok.”

After two months of operation by the cross-claimant, this does not seem to me to indicate some fault on the part of the cross-defendant.

“Checked A/C unit to find No power Due to Faulty evap fan motor & P C board. Replaced & tested operation to find all ok. Also fixed both systems to work on heating.”

Bearing in mind the age of the equipment and the date of this invoice, some three and half months after the eviction of Pub Oz Pty Limited on 10 March 2003, it is hard to find in it evidence upon which a finding of faulty maintenance should be made against the cross-defendant.

There was, of course general evidence about the state of the air conditioners. I conclude from this evidence that they were all old. Mr Mason, in his affidavit, said that four of the five air conditioning units in the ground floor area “needed repair or replacement”. But he did not specify any reason why it would be necessary to replace them. Nor, if the need of repair was apparent at the time of the eviction of Pub Oz Pty Limited, is it easy to understand the series of separate calls apparently made to Briggs Air Conditioning to deal with particular problems which, so far as their invoices indicate, had just arisen from time to time over a period of three and half months.

“The Lessee covenants with the Lessor as follows:-

…

(v) The Lessee will, so often as may be reasonably required by the Lessor having regard to the condition of the Premises at the commencement of the Lease, paint all outside and inside wood, iron and other works now or usually painted and also shall repaper such parts of the premises as are now plastered, in each event in a good and workmanlike manner and use good quality materials.

…

PROVIDED THAT

PROVIDED FURTHER

For the cross-defendant it was argued that no relevant requirement had been made during the currency of the lease. It was also argued that the replacement of air conditioning equipment was not shown to be a necessity that had arisen as a result of the lessee’s failure to carry out maintenance as and when reasonably required so to do during the term of the lease. It seems clear, as a matter of English, that the final words of paragraph (cc) “as a result of the Lessee’s failure to maintain and repair the same as hereinbefore provided” must refer back to the provision, at the beginning of the paragraph, requiring the lessee to maintain and repair the air conditioning and ventilation plant “as and when reasonably required by the lessor so to do during the term of this lease”. Accordingly, there being no such requirement, the second proviso in the paragraph seems clearly to negative an obligation to replace or renew air conditioning as distinct from any obligation to repair it. This conclusion alone would be sufficient to require the rejection of the item of $4,755 included in the claim. But, in any case, that item could only be made good upon proof that it was reasonable to require replacement as distinct from repair of the equipment in question; and the evidence is far from establishing this.

generalia

specialibus

non derogant

(s) Five broken windows

Under this heading, a claim is made for $370.91 in respect of an invoice received from O’Brien Glass dated 17 July 2003 referring to work completed 15 July 2003. Although Mr Mason has again made a broad statement, which does not appear to be correct, that there were five broken windows replaced by O’Brien Glass, the invoice in fact does not refer to more than three, and indicates only two locations, the men’s room and the cellar. Mr Mason also gave evidence that “[i]n some cases windows of the bedroom were cracked or broken”, but there is no invoice for repair or re-glazing of a bedroom window. The invoice from O’Brien Glass should be allowed as a normal repair.

(t) Missing or damaged and unusable bar stools

Under this heading, a claim is made for $2,748 for the replacement of 12 stools. The invoice is dated 2 July 2003 and it charges $229 per stool for what are described as “Colonial stools to match existing upholstery: Nylex Cordova ‘Smoke’”. These stools appear to be for the purpose of replacing 12 out of 23 timber colonial style bar stools which were valued in the Gray Eisdell Timms Pty Ltd inventory at between $40 and $70 each in 1993. With the most meticulous maintenance, it is hard to believe that in ten years the stools would have remained in perfect condition and, although money values have certainly changed, their replacement in the manner for which the claim is made does seem, as the cross-defendant submits, to require some explanation. Counsel for the cross-claimant offered none in the written submissions in reply except to contend that “the values are not relevant to control the amount which is claimable.”

(u) Missing or damaged curtains

Under this heading, a claim is made for $4,090.91. It is alleged the blinds and curtains in the hotel were in a state of disrepair, and a quotation was obtained to supply and install fire retardant blockout curtains at a cost of $12,000. However, this work was not carried out. Instead Woodlock PVC Venetian blinds were installed at the cost claimed as set out in an invoice dated 3 October 2003. The evidence of Mr Mason is that the curtains in each of the bedrooms were badly worn and torn. Notwithstanding indications to which I have already referred that Mr Mason’s evidence, as well as other evidence called on behalf of the cross-claimant, was exaggerated, I accept that the replacement of the curtains was probably required under clause 24(c)(i) of the lease. However, the obligation under that clause, as I have previously pointed out, is limited to items “of a like nature and equal value”. It is plain that, when the quotation for fire retardant curtains was obtained, this limitation was overlooked or ignored, and it is not clear to me that any basis has been shown on which I could find that the full cost of new Venetian blinds was reasonably justified; certainly some part of that amount was.

(v) Damaged and marked walls, ceilings and woodwork

sic

The dining area has not been regularly cleaned polished or waxed and has dust and food stains which I was unable to remove without damaging the stain and lacquer coatings. This area would need the same treatment as the gaming area and would also need to be professionally chemically cleaned prior to works being done. The bar area has extensive damage to all panels, and many screw holes in need of repair which normally would not be economical to repair. But to maintain the integrity of the existing panels throughout the rest of the hotel, these repairs will be quoted but no guarantees or responsibilities will be given to the exact match of these. If however you would need the bar area brought back to the original state these panels would need to be replaced or completed on site with a[n] added cost of $2,580.00 plus GST.

Note We feel this is the way to approach this problem, if a cheaper method is adopted it will not match to the original design. This job will be the coordination of four trades and we will need at least 10 working days notice prior to starting. Approximate m2 to be recoated = 83.5m2 … “

There followed the following figures: for pre-cleaning $950; for recoating $5,427; for repairs $4,785 totalled to $11,162 plus GST $1,116.20 yielding a total payable of $12,278.20. From this breakdown, it will be apparent that the figure of $12,278.20 claimed by the cross-claimant has been inflated by the inclusion of a sum of $1,116.20 GST. The correct claim is $11,162.

For the cross-defendant, it was submitted that the quotation was made on the basis of taking the panels back to their original condition some 30 years earlier; and it was put that this could not have been the cross-defendant’s responsibility. The quotation itself is somewhat ambiguous on the subject, but Mr Mason was cross-examined about this panelling work. Although I thought he was somewhat evasive on the matter, he did at one stage of his cross-examination concede that the panelling was old, possibly 30 years old, and that the instruction to the repairer “was to reinstate the woodwork to its original condition”, that is, “when it was new”. He agreed that meant “a fairly careful process of sanding it all back … [a]nd then reapplying fresh lacquer to the original woodwork”. He also agreed that that was “a big job”. He said the alternative would be to replace all existing timberwork with new timberwork, but he did not say what difference that would make to the cost. However, on the face of it, the difference would seem likely to be considerable.

The assumption in the cross-claimant’s claim appears to be, as its written submissions accepted, that it was necessary to do this work to bring the wood panelling back into a condition similar to that which it was in at the commencement of the lease. But as I understood the submission, counsel meant the commencement of the original lease in 1993. For reasons I have already explained, I think that exceeds the obligation of the cross-defendant, and there was really no satisfactory evidence to indicate how far this now 30 year old panelling had deteriorated by 1998. This also is an item which, on the evidence, is allowable to some degree, but not in the full amount claimed.

(w) Damaged seals on the refrigerators in the bar area

Under this heading, a claim is made for $519.91 based on an invoice from Egginton’s Refrigeration Seals dated 4 April 2003. No argument was raised against the allowance of this amount, and I allow it as a repair.

Labour costs claimed

Under this heading a claim is made for $7,532.17 in respect of labour costs involved in work alleged to have been done by workmen associated with the cross-claimant. The cross-defendant submits that details have not been furnished showing how much work, and at what cost, was done to rectify particular breaches that might be attributable to Pub Oz Pty Limited. The cross-claimant responds that the amount claimed is based on time sheets Mr Mason had been requested to prepare on the hours spent arranging for repairs to the premises. It seems to me a major problem exposed by the cross-defendant’s submission is that the work to which the timesheets relate, although in part directed to matters that could properly be regarded as repairs, was, in the light of my earlier findings, partly directed, not to repairs, but to improvements and to the effecting of the changes that Mr Hemmes desired to make. Some apportionment is required which, of necessity, will involve a difficult exercise in estimation, especially as much of the work was not even sketchily covered by the evidence.

Paint and nails

There is an invoice for $47.99 dated 2 April 2003 which I infer relates to the repair job done on three steps of the stairs. I shall allow this item.

Painting

Under this heading, the cross-claimant claims the sum of $19,150 based on an invoice dated 24 September 2003 from Painters & Decorators Pty Ltd. For the cross-defendant, it is submitted that the lessee’s obligation was to paint “so often as reasonably required by the lessor having regard to the condition of the premises at the commencement of the lease”, this qualification being stated in clause 8(v) of the lease. But I think there is a clear distinction between the drafting of clause 8(v) as a positive obligation placed upon the lessee in certain circumstances and the drafting of clause 8(cc) with its express proviso limiting the liability of the lessee except in certain circumstances. In my opinion the state of the premises, when the point is reached at which they need repainting, is a matter falling within the covenant to repair as well as within any obligation imposed pursuant to clause 8(v). In this case, the evidence of the cross-claimant’s witnesses as to the need for painting is supported by evidence that the last time the premises had been painted (except, perhaps, for some particular parts) was in 1996. I conclude there was a need for repainting and accordingly this claim should be allowed, subject to one matter. The invoice indicates that a sum of $1,340 inclusive of goods and services tax was incurred because of the cross-claimant’s choice to repaint, not so as to restore the previous condition of certain rooms, but so as to change the colour in a way that required extra coats of paint. I do not think this amount could be allowable against the cross defendant and I deduct the sum of $1,218.18 being the amount involved less goods and services tax.

Repair to water damaged ceiling of bathroom on level 1

“Works completed on level one bathroom. Remove water damaged ceiling and cornice clean up. Install new gyprock ceiling and cornice. Patch ceiling hole and make both ready for painter.”

Having regard to the date of this invoice, I accept the cross-defendant’s submission that the mere inclusion of it in the claim supported by Mr Mason is not a sufficient basis for allowing it against the cross-defendant. I have simply not been satisfied as to when the particular water damage to which this invoice relates occurred.

Repairs to dimmers

Under this heading, a claim is made for $596. The cross-defendant submits the claim is not shown to be related to anything attributable to the lessee, and reliance is placed on the terms of the job sheet of the electrical contractor Grose & Co dated 8 August 2003. The cross-claimant contents itself with responding that Mr Mason was not cross-examined on the matter. It seems to be that response is inadequate, since the description of the work clearly indicates that it related to the investigation of possible faults or problems in relation to the dimmers, which appear to have been dealt with partly by improving the way they were mounted, so as to gain more ventilation, and partly by reducing the load by changes to the dimmers and reducing the wattage of all bar lights. There is no suggestion in the description of the work that it had been necessitated by poor maintenance either before the eviction of the lessee or at any time.

Light dimmer

45 Having examined the detail of the cross-claim, it is appropriate to make a general comment. Many of the allegations on which it is based involve value judgments. In a number of respects, the cross-claimant alleges serious failures reflecting on the conduct of the hotel by the cross-defendant. Yet the evidence is that Jennifer Waldron, an executive of the cross-claimant who did not impress as likely to look for less than satisfactory standards for herself, lunched regularly at the hotel from April 1998 to November 2000, while she was in Sydney, enjoying, as she said, “good food” there with “nothing unpleasant about it”. Indeed, the popularity of the hotel was given by Mr Hemmes as a justification for his increasing its rent so greatly! And despite the strong criticism by the cross-claimant’s witnesses of the accommodation provided at the hotel, the cross-claimant did not immediately change very much, as will have been gathered from the dates of the invoices that are relied upon. Notwithstanding the large amount ultimately spent on the panelling in the public areas, which Ms Waldron must have seen, there was no demand made during the currency of the lease to repaint or take any other step on the footing the lessee was not showing proper care of the premises. The evidence given by the cross-claimant’s witnesses seemed to me to be exaggerated, and I conclude that much of the work and replacements owed a great deal to Mr Hemmes’s desire to change the hotel to fit the standard he required for a hotel belonging to the group of hotels conducted by his companies. It was admitted that one of the electrical invoices (for $5,045) was more than half related to improvements, so that the amount claimed was reduced to $2,293.18, and even then not justified in any satisfactory manner. On the whole of the evidence, I conclude that this was not an isolated case – it was a case where the terms of the invoice revealed the fact, while in other cases invoices were too broadly expressed to do so.

46 That conclusion, of course, leaves the Court with an extremely difficult task of estimation of the various amounts that should be allowed in respect of items not wholly justifiable. But it is clear the task must be carried out. In the Commonwealth of Australia v Amann Aviation Pty Limited (1991) 174 CLR 64 at 83, Mason CJ and Dawson J (who with Brennan and Gaudron JJ formed the majority) said:

Jones v Schiffmann

Amann Aviation Pty Limited v Commonwealth of Australia

47 Accordingly, and having regard to my general conclusions and the specific matters set out earlier in respect of each item in the itemised claim, I have estimated the amounts in those cases where I have concluded some amount less than the full amount claimed should be allowed. I set out below details of the award that should be made under the cross-claim:

(a)	Damaged and non-functioning ice machine	$107.50
(b)	Damage to bathroom fittings	$2,000.00
(bb)	Damage to plumbing on roof of laundry	$1,345.00
(c)	Damaged and blocked guttering and downpipes	$1,495.00
(d)	Staircase	$NIL
Termite protection	$NIL
(e)&(f)	Damaged and non-functioning lights, including the emergency and exit lights; and unsafe electrical wiring and disconnection of the external lights of the property	$1,500.00
(h)	Damage to the rooftop floor above the toilets on level two	$NIL
(j)	Two missing and 11 damaged and non-functioning bar fridges	$1,000.00
(n)	14 damaged, dirty and stained double bed ensembles	$2,000.00
(o)	Missing, dirty and stained linen for bedding in the accommodation area	$750.00
(p)	Damaged, torn and stained carpet on level one and two	$10,000.00
(q)	12 non-functioning television sets	$750.00
(r)	Damaged and non-functioning air conditioners	$NIL
(s)	Broken windows	$370.91
(t)	Missing or damaged and unusable bar stools	$600.00
(u)	Missing or damaged curtains	$3,000.00
(v)	Damaged and marked walls, ceilings and woodwork	$6,000.00
(w)	Damaged seals on refrigerators in bar area	$519.91
Labour costs	$2,500.00
Paint and nails	$47.99
Painting	$17,931.82
Repair to water damaged ceiling of bathroom on level one and repairs and purchase relating to dimmers	$Nil
TOTAL	$51,918.13

48 I shall leave questions of interest until the bringing in of short minutes. It is not clear to me what claims for reimbursement have been made or when they have been made. It may be that counsel can reach some agreement on this issue.

49 The only order that I make at this stage is that the parties bring in, on a date to be fixed, short minutes of orders appropriate to be made in the light of these reasons, when any application for costs can also be heard.

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Citations

Callaghan v Merivale CBD Pty Ltd [2005] NSWSC 985

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CITATION:	Callaghan v Merivale CBD Pty Limited [2005] NSWSC 985
HEARING DATE(S):	08/08/05-11/08/05
JUDGMENT DATE :	20 October 2005
JUDGMENT OF:	Burchett AJ
DECISION:	Verdict for plaintiff in the action and for the cross-claimant on cross-claim.

CATCHWORDS:	Lease - rent review clauses - whether time of essence in any respect - payment of rent demanded which substantially exceeded rent due - mistake as to legal obligation - mistake induced by lessor's representation about obligation - inference from intention to induce belief that belief was induced - meaning of "anniversary" - construction contrary to ordinary meaning of word to avoid absurdity - power of court to mould language - principles of interpretation - rule as to construction of rent review clauses - indications to contrary of prima facie rule - effect of lenity in one respect and strictness in an other as an indication the strict construction must be adhered to where it is applicable - effect of lessor itself failing to comply with a time requirement - consideration of waiver as estoppel or as election - implied agreement - equitable assignment where assignor ASIC on behalf of defunct company not joined - effect - nature of renewal of a lease - effect of covenant to repair in short form under Schedule 4 of the Conveyancing Act - effect of words "having regard to the condition of the demised premises at the commencement of the lease " - meaning of covenant to replace a worn out item with one "of a like nature and equal value"
LEGISLATION CITED:	Corporations Act 2001 (Cth) Conveyancing Act 1919 (NSW)
CASES CITED:	Gould v Vaggelas (1985) 157 CLR 215 Como Investments Pty Ltd (In Liquidation) v Yenald Nominees Pty Ltd (1997) ATPR 43 Kiriri Cotton Co Ltd v Dewani [1960] AC 192 David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353 Peking Palace Ltd (Tang's Restaurant) v Trizec Construction Limited (1987) 20 BCLR (2d) 161 Duchow v New York State Teamsters Conference Pension and Retirement Fund (1982) 691 F 2d 74 Save Our Suburbs (SOS) NSW Incorporated v Electoral Commissioner of New South Wales (2002) 55 NSWLR 642 Short v F W Hercus Pty Limited (1993) 40 FCR 511 Fitzgerald v Masters (1956) 95 CLR 420 Dockside Holdings Pty Ltd v Rakio Pty Ltd (2001) 79 SASR 374 Westpac Banking Corporation v Tanzone Pty Ltd (2000) 9 BPR 17521 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 Gollin & Company Limited v Karenlee Nominees Proprietary Limited (1983) 153 CLR 455 G R Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80 Mecca Leisure Ltd v Renown Investments (Holdings) Ltd (1984) 49 P&CR 12 Mobil Oil New Zealand Ltd v Mandeno [1995] 3 NZLR 114 W & R Jack Ltd v Fifield [2000] 3 NZLR 129 Perri v Coolangatta Investments Proprietary Limited (1982) 149 CLR 537 Charles Rickards Ld v Oppenheim [1950] 1 KB 616 Craine v The Colonial Mutual Fire Insurance Company Limited (1926) 28 CLR 305 George v Roach (1942) 67 CLR 253 Deaves v CML Fire and General Insurance Company Limited (1979) 143 CLR 24 Johnson v Agnew [1980] AC 367 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 33 Bank Street Nominees Pty Ltd v Citipower Pty (1997) BC 9702794 Solle v Butcher [1950] 1 KB 671 David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353 Commissioner of State Revenue (Victoria) v Royal Insurance Australia Limited (1994) 182 CLR 51 Roxborough v Rothmans of Pall Mall Australia Limited (2001) 208 CLR 516 British American Tobacco Australia Ltd v The State of Western Australia (2003) 217 CLR 30 Weddell v Pearce [1988] 1 Ch 26 Jennings v Credit Corp Australia Pty Ltd (2000) 48 NSWLR 709 Gerraty v McGavin (1914) 18 CLR 152 Lurcott v Wakely & Wheeler [1911] 1 KB 905 Commonwealth of Australia v Amann Aviation Pty Limited (1991) 174 CLR 64 Amann Aviation Pty Limited v Commonwealth of Australia (1990) 22 FCR 527
PARTIES:	Edward Callaghan (plaintiff) Merivale CBD Pty Limited (defendant) Merivale CBD Pty Limited (cross-claimant) Edward Callaghan (cross-defendant)
FILE NUMBER(S):	SC 2767 of 2002
COUNSEL:	Mr P Bolster and Mr E Hyde for the plaintiff/cross-defendant Mr G Blake SC and Ms S Higgins for the defendant/cross-claimant
SOLICITORS:	Tiernan & Associates for the plaintiff/cross-defendant Antonys Lawyers for the defendant/cross-claimant