CBS Leasing Pty Ltd v Imseis - [2020] NSWSC 1408

Supreme Court

New South Wales

Medium Neutral Citation: CBS Leasing Pty Ltd v Imseis [2020] NSWSC 1408
Hearing dates: 21-22 September 2020
Date of orders: 13 October 2020
Decision date: 13 October 2020
Jurisdiction: Equity
Before: Darke J
Decision:
Orders to be made in accordance with [100] of reasons.

Catchwords:
LAND LAW – leases – agreement for lease – breach – related company of plaintiff enters into contract for sale of premises with defendants – completion of contract for sale conditional upon entry into Agreement for Lease between defendants as landlord and plaintiff as tenant – Agreement to Lease entered into and sale completed – Agreement for Lease requires defendants to undertake Landlord’s Works with practical completion to occur by defined date – whether date varied by agreement – handover of premises to plaintiff to occur to allow plaintiff to perform Tenant’s Works– liquidated damages payable if Landlord’s Works delayed beyond defined date – damages calculated on daily basis until handover occurs – held that handover occurred when plaintiff granted access to commence Tenant’s Works and received set of keys – liquidated damages calculated accordingly
CONSUMER LAW – misleading conduct under statute – misleading or deceptive conduct – representations – cross-claimants contend cross-defendant falsely represented that Construction Certificate for development had been approved – representation held to be misleading – cross-claimants did not adduce evidence that had cross-defendant’s conduct not occurred they would have taken a different course and thereby avoided loss – cross-claimants’ claim for damages under Australian Consumer Law fails

Legislation Cited:
Australian Consumer Law, ss 18, 30, 236
Civil Procedure Act 2005 (NSW), s 100

Cases Cited:
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25
Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658; [2019] NSWCA 307

Category: Principal judgment
Parties: CBS Leasing Pty Ltd (Plaintiff)
Ebrahim Imseis (First Defendant)
Rima Imseis (Second Defendant)
Representation:
Counsel:
Mr D S Weinberger (Plaintiff)
Mr P Cutler (Defendants)
Solicitors:
HWL Ebsworth Lawyers (Plaintiff)
Garry Pickering Solicitor (Defendants)

File Number(s): 2019/330898
Publication restriction: None

Judgment

Introduction

These proceedings concern a transaction entered into in 2016 in respect of a property at 280 Fifteenth Avenue, Austral. The property was sold by the cross-defendant, Pham Property Investments Pty Ltd (“Pham Property”) to the defendants/cross-claimants, Ebrahim and Rima Imseis. Ebrahim and Rima Imseis then entered into an Agreement for Lease with the plaintiff, CBS Leasing Pty Ltd (“CBS”). CBS is a company related to Pham Property. CBS, and companies related to it, conduct a business operating childcare centres.
The Agreement for Lease was entered into on 15 July 2016, the day the contract for sale was completed. Under the terms of the Agreement for Lease, Ebrahim and Rima Imseis were obliged to carry out certain Landlord’s Works in order to make the premises into “a turnkey childcare facility” as depicted in certain architectural plans. The premises were to be handed over to CBS for it to undertake certain Tenant’s Works before the lease itself would commence.

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2020] NSWSC 1408
Decision Date: 13 October 2020

CaseChat Overview and Summary

CBS Leasing Pty Ltd brought an action against Imseis, asserting that the defendants had breached an agreement for lease. The case was heard in the Supreme Court of Queensland. The primary dispute centred around a contractual agreement for the lease of premises, where the defendants were required to undertake certain works as the landlord, with a defined completion date. The plaintiff, CBS Leasing, was to perform works as the tenant upon receiving the premises. The defendants completed the sale of the property but delayed in performing the landlord's works, leading to a claim for liquidated damages by the plaintiff.

The court was required to decide whether the completion date for the landlord's works had been varied by agreement and whether the handover of the premises occurred when the plaintiff was granted access to commence the tenant's works and received the set of keys. Additionally, the court had to determine if the cross-claimants' contention that the cross-defendant falsely represented that a Construction Certificate for the development had been approved was misleading or deceptive conduct under the Australian Consumer Law, and if so, whether the cross-claimants were entitled to damages.

The court found that the handover of the premises occurred when the plaintiff was granted access to commence the tenant's works and received the set of keys, even though the landlord's works had not been practically completed by the defined date. Consequently, the liquidated damages were calculated from the date of handover. Regarding the misleading conduct under the Australian Consumer Law, the court held that the cross-defendant's representation was misleading; however, since the cross-claimants did not prove that had the representation not occurred, they would have taken a different course and thereby avoided loss, their claim for damages failed.

The court ordered that the defendants pay the plaintiff liquidated damages from the date of handover and dismissed the cross-claimants' claim for damages under the Australian Consumer Law.

Orders