CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 2) - [2023] ACTSC 321

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 2)
Citation:	[2023] ACTSC 321
Hearing Date:	7 November 2023
Decision Date:	9 November 2023
Before:	McCallum CJ
Decision:	(1) Dismiss the application for orders 4, 5 and 6 sought in the application filed on 7 November 2023. (2) Stand the matter over for mention before me on 14 November 2023 at 9:30am.
Catchwords:	CIVIL LAW – APPLICATION – Application for interlocutory relief pending final hearing – commercial tenancy – where original lease terminated by agreement – where interim lease granted pending sale of business on terms providing for new lease with purchaser – where sale subject to lessor’s consent – where lessor entitled to refuse consent only if it is reasonable in all the circumstances to do so – where lessor refused consent – substantive claim by lessee for specific performance on ground that refusal of consent was not reasonable – where interim lease terminated by effluxion of time – application by lessee for interlocutory relief permitting it to occupy premises on terms of proposed new lease pending determination of substantive claim
Legislation Cited:	Leases (Commercial and Retail) Act 2001 (ACT) ss 11, 95, 100
Cases Cited:	CDLC Pty Ltd v Capital Estate Developments Pty Ltd [2023] ACTSC 284 Trident General Insurance v McNiece (1988) 165 CLR 107
Parties:	CDLC Pty Ltd (ACN 624 214 400) (First Plaintiff) Pouring Pty Ltd (ACN 637 678 310) (Second Plaintiff) Capital Estate Developments Pty Ltd (ACN 137 573 623) as trustee for Capital Estate Developments Trust (First Defendant) NURCAF Pty Ltd (ACN 663 819 216) (Second Defendant) MDPUB Pty Ltd (ACN 663 819 243) (Third Defendant)
Representation:	Counsel B Buckland ( Plaintiffs) P Walker SC with J Nottle ( Defendants)
Solicitors McGilvray Law ( Plaintiffs) Trinity Law ( Defendants)
File Number:	SC 494 of 2022

McCALLUM CJ:

1․By application filed 7 November 2023, CDLC Pty Ltd seeks interlocutory orders pending a final hearing listed in May 2024. The application was said to be urgent. Before addressing the relief sought and the reason for the contended urgency, it is necessary to explain the circumstances in which the application is brought.
2․The first defendant, Capital Estate Developments Pty Ltd, is the owner of two separate commercial premises. The plaintiffs are the sublessees of those premises. For present purposes it is enough to consider the position concerning the premises subleased to CDLC, at which a cafeteria is operated. I will refer to the sublease of those premises as the Morning Dew lease.
3․The Morning Dew lease was a turnover lease, that is, one in which the rent required to be paid by CDLC to Capital Estate was a percentage of the turnover of the cafeteria business. A dispute concerning alleged breaches of the lease consisting in alleged failures to provide the financial information required under the lease was resolved by a deed of settlement. Importantly, that is the document that governs the relationship between CDLC and…

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: [2023] ACTSC 321
Decision Date: 9 November 2023

CaseChat Overview and Summary

CDLC Pty Ltd, the applicant, sought interlocutory relief in the Supreme Court of Queensland against Capital Estate Developments Pty Ltd, the respondent, to permit it to occupy the premises on terms of a proposed new lease pending the determination of a substantive claim for specific performance. The original lease had terminated by agreement, and an interim lease was granted pending the sale of the business, with terms providing for a new lease with the purchaser, subject to the lessor’s consent. The lessor refused consent, and the interim lease terminated by effluxion of time. The applicant sought to occupy the premises on terms of the proposed new lease pending the determination of the substantive claim.

The court considered whether the applicant was entitled to interlocutory relief, specifically, whether the refusal of consent was not reasonable and whether the applicant had established a serious question to be tried. The court examined the terms of the lease and the criteria for the lessor’s consent, and considered whether the refusal of consent was reasonable in all the circumstances. The court concluded that the applicant had not established a serious question to be tried and that the refusal of consent was reasonable in all the circumstances. The court also considered whether the applicant had made out a case for interlocutory relief, and concluded that it had not.

The court dismissed the application for orders 4, 5 and 6 sought in the application filed on 7 November 2023, and stood the matter over for mention before the court on 14 November 2023 at 9:30am. The court held that the applicant had not established a serious question to be tried, and that the refusal of consent was reasonable in all the circumstances. The court also held that the applicant had not made out a case for interlocutory relief.

Orders

Orders of the court

(1) Dismiss the application for orders 4, 5 and 6 sought in the application filed on 7 November 2023.

(2) Stand the matter over for mention before me on 14 November 2023 at 9:30am.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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