Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 3]

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JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   CLAMBAKE PTY LTD -v- TIPPERARY PROJECTS PTY LTD [No 3] [2009] WASC 52

CORAM:   EM HEENAN J

HEARD:   13 - 17, 20 - 24, 27 - 31 OCTOBER & 3 - 7, 10 - 14, 17 - 21 NOVEMBER 2008

DELIVERED          :   9 MARCH 2009

FILE NO/S:   CIV 1707 of 2003

BETWEEN:   CLAMBAKE PTY LTD (ACN 009 242 371)

Plaintiff

AND

TIPPERARY PROJECTS PTY LTD (ACN 054 744 713)
First Defendant

WARREN PERRY ANDERSON
Second Defendant

FILE NO/S              :CIV 2093 of 2003

BETWEEN             :OWSTON NOMINEES No 2 PTY LTD (ACN 001 769 099)

First Plaintiff

TIPPERARY PROJECTS PTY LTD (ACN 054 744 713)
Second Plaintiff

AND

CLAMBAKE PTY LTD (ACN 009 242 371)
First Defendant

LAND CAPITAL PTY LTD (ACN 058 548 806)
Second Defendant

IVOR FREDERICK COHEN
Third Defendant

Catchwords:

Lease - Claim for unpaid rent and outgoings - Holding over tenancy - Whether claims for interest a penalty - Management fees - Rent review on CPI index - Attempted rent review after termination of lease - Claims for costs (including legal costs) - Other outgoings

Liability for tenant to pay GST under lease where covenants do not expressly extend to GST liability - Review opportunities to increase or decrease rent

Set off - Availability of tenant's claim for damages as a set off against rent - Equitable set off - Provisions in lease excluding set off against rent

Guarantee - Claim against guarantor - Liability of guarantor - Whether guarantor can set off against his liability under the guarantee a claim by the principal debtor for damages

Cross-claim for breach of covenant to insure against risks for public liability and fire - Extent of liability

Action for damages for loss of property caused by fire - Negligence - Nuisance - Occupiers Liability Act 1985 (WA) - Damages for breach of covenant for quiet enjoyment in lease - Misleading and deceptive conduct s 52 and s 82 of the Trade Practices Act 1974 (Cth) - Damages for misleading and deceptive conduct s 9 and s 10 of the Fair Trading Act 1987 (WA) - Silence as misleading and deceptive conduct - Alleged obligation to disclose deficiencies in fire protection system in leased premises

Bailor and bailee - Ability of bailee to sue in its own name for the entire value of property owned by bailor - Obligation to account to bailor - Need to elect when judgment taken - The rule in The Winkfield [1902] P 42 - Whether that rule applies to claims under the TPA or the FPA - Assignability of causes of action under the TPA

Exclusion clauses - Whether bailor bound by exclusion clauses applying to bailee

Uniform building by-laws - Whether UBBLs represent a relevant standard of care for fire protection requirements - Alleged approval of premises by local authority - Effectiveness of an operating fire sprinkler system to contain fire - Alleged need to install operating fire sprinkler system - Alternatives…

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Details
Case
[2009] WASC 52
Decision Date

CaseChat Overview and Summary

In Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 3], the plaintiff, Clambake, sought recovery of unpaid rent and outgoings from the defendants, Tipperary and others, arising from a holding over tenancy. Clambake also sought damages for breach of the covenant of quiet enjoyment, negligence, nuisance, and misleading and deceptive conduct under various Acts. Tipperary counterclaimed for damages and indemnity against Clambake for breach of the covenant of quiet enjoyment and for wrongly subletting the premises. The central legal issues included whether claims for interest were penalties, the enforceability of management fees and rent review provisions, and the availability of equitable set-off against rent claims. The court addressed these issues and concluded that the claims for interest were not penalties, management fees were enforceable, and rent review provisions were valid. The court also found that there was no equitable set-off available against rent claims. The court further determined that Clambake was not liable to pay or recover GST, and claims for costs and interest were to be tried separately. Tipperary's claims for damages were dismissed, but Clambake's claims for misleading and deceptive conduct were upheld. The court ordered Clambake to be indemnified by Tipperary for the damages awarded against Clambake for misleading and deceptive conduct.

The court's reasoning was grounded in the terms of the lease, relevant statutes, and case law. It held that the interest provisions in the lease were not penalties but legitimate pre-estimates of loss. The court also found that the management fees and rent review clauses were valid and enforceable. Regarding set-off, the court noted the express exclusion of set-off in the lease and the lack of any equitable basis for such a set-off. On the issue of GST, the court held that the lease's covenants did not extend to GST liability. The court's decision on the misleading and deceptive conduct claim relied on evidence showing that Clambake had failed to disclose deficiencies in the fire protection system. The court awarded significant damages to Clambake for this breach. The court's reasoning was detailed, considering the specific terms of the lease, statutory provisions, and relevant legal principles. The outcome ensured that Clambake was compensated for the misleading conduct while protecting the defendants from unwarranted claims.

Orders

Orders of the court

CIV 1707 of 2003:

Judgment for plaintiff for $408,736.10 plus interest as claimed at 17% per annum (to be calculated) against first and second defendants

No liability to pay or recover GST

Claim for costs and interest pursuant to lease ordered to be tried separately

No entitlement to set-off in equity by either defendant

CIV 2093 of 2003:

Tipperary's claims for damages for breach of the covenant of quiet enjoyment, negligence, nuisance, breach of the duties arising under the Occupiers' Liability Act 1985 (WA) and for misleading and deceptive conduct contrary to the TPA and the FTA are all dismissed

Owston's claims for damages against Land Capital and Mr Cohen are all dismissed

Owston's claims for damages for negligence, nuisance and breach of the OLA are all dismissed

Owston's claims for damages for claims for misleading and deceptive conduct contrary to the TPA and the FTA against Land Capital and Mr Cohen are dismissed

Owston's claim for damages for misleading and deceptive conduct contrary to the TPA and the FTA against Clambake are upheld and damages assessed in the amount of $14,625,400

Counterclaim:

Clambake's counterclaim for an indemnity against Tipperary for its liability to Owston in the amount found of $14,625,400 be upheld and judgment entered for Clambake against Tipperary for an indemnity for that amount on that aspect of the counterclaim

The counterclaim by Mr Cohen against Tipperary be dismissed

Clambake's counterclaim against Tipperary for damages for wrongfully subletting or parting with possession of some or all of the leased premises without consent be dismissed

The counterclaim by Clambake and Mr Cohen for an indemnity or contribution against Tipperary on the grounds that the latter is a joint or concurrent tortfeasor be dismissed

The application by Tipperary to disallow the amendments made by Clambake introducing the claim for damages for the alleged failure to insure be refused

The claim by Clambake against Tipperary for damages for the latter's alleged failure to insure, pursuant to Section IV of the lease, be stood over for trial as a separate issue with an order that the matter be listed for directions at a time and date to be fixed

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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