JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	10 October 2017 and 11 and 12 October 2017 (Further written Submissions)
DATE OF JUDGMENT:	20 October 2017
CASE MAY BE CITED AS:	Casdar Pty Ltd v Fanous
MEDIUM NEUTRAL CITATION:	[2017] VSC 616

---

LEASES AND TENANCIES – Whether document styled “heads of agreement” was in the circumstances an immediately enforceable agreement for lease – Masters v Cameron (1954) 91 CLR 353 – Verrocchi v Messinis [2016] VSC 490.

PRACTICE AND PROCEDURE – Victorian Civil and Administrative Tribunal – Appeal against Tribunal orders – Victorian Civil and Administrative Tribunal Act 1998 s 148(1).

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Korman	Belleli King & Associates
For the Defendant	Mr A. Felkel	Sabelberg Morcos Lawyers

HIS HONOUR:

Introduction

This proceeding has been brought by Originating Motion, dated 24 August 2017, pursuant to s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”). The Plaintiff, Casdar Pty Ltd, is seeking both leave to appeal and to appeal from orders of the Victorian Civil and Administrative Tribunal (“the Tribunal” or “VCAT”) which were made by Member A. Kincaid on 26 July 2017 in VCAT proceeding number BP59/2017.[1] The Defendant, Mr Joseph Fanous, resists both the Plaintiff’s leave application and the appeal itself.
[1]Casdar Pty Ltd v Fanous (Building and Property) [2017] VCAT 1464 (referred to in these reasons as “Tribunal’s Reasons”).

The Plaintiff is described in a document styled “Heads of Agreement”, the critical document the subject of these proceedings, as the “Lessor” of premises being “Part of shop 6/51 Heatherton Road, Endeavour Hills” (“the Premises”). The Defendant is described in the same document as the “Lessee”.

In substance, the critical issue before VCAT was whether the document described as the Heads of Agreement constituted an agreement for lease under which the parties intended to be immediately bound by its terms.

In the interests of expedition and economy in terms of time and cost, this proceeding was heard as a combined or “rolled up”[2] application for leave to appeal the Tribunal decision and, if leave were to be granted, the hearing of the appeal itself.
[2]An expression now well understood: see R (Miller) v Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin).

Principles applicable with respect to appeal

Section 148(1) of the VCAT Act provides:

A party to a proceeding may appeal on a question of law from an order of the Tribunal in the proceeding—
(a)if the Tribunal was constituted for the purpose of making the order by the President or a Vice President, whether with or without others, to the Court of Appeal with leave of the Court of Appeal; or
(b)in any other case, to the Trial Division of the Supreme Court with leave of the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Casdar Pty Ltd v Fanous

Details

AGLC: Casdar Pty Ltd v Fanous [2017] VSC 616
Case: [2017] VSC 616
Decision Date: 20 October 2017

CaseChat Overview and Summary

Casdar Pty Ltd, the appellant, filed an appeal against Fanous, the respondent, concerning a dispute over whether a document, styled as "heads of agreement," constituted an immediately enforceable agreement for lease or was merely an agreement to agree in the future. The case was heard in the Supreme Court of Victoria. The primary issue before the court was to determine whether the document in question, styled as a "heads of agreement," was an enforceable lease agreement under the principles established in Masters v Cameron (1954) 91 CLR 353 and Verrocchi v Messinis [2016] VSC 490. The court had to assess whether the document contained all the essential terms of a lease agreement, such as the parties, the property, the duration, and the rent, or if it merely outlined a framework for future negotiations.

The Supreme Court examined the content and context of the "heads of agreement" to determine whether it constituted a binding contract. The court noted the importance of identifying whether the document was an agreement to agree in the future or a complete and enforceable lease agreement. The court applied the principles from Masters v Cameron, which emphasised the need for certainty in the terms of a lease, and Verrocchi v Messinis, which highlighted the significance of the document's language and context. The Supreme Court found that the "heads of agreement" lacked several essential terms, such as the duration of the lease and the precise rent amount, and thus did not constitute an immediately enforceable lease agreement.

Based on the analysis, the Supreme Court held that the "heads of agreement" did not meet the criteria for an enforceable lease agreement. The court concluded that the document was, in fact, an agreement to agree in the future, and therefore not binding in its current form. The appeal was dismissed, and the orders of the Victorian Civil and Administrative Tribunal were affirmed. The Supreme Court's decision underscores the importance of clear and comprehensive documentation when entering into lease agreements to avoid future disputes.

Orders