Clone Pty Ltd v Players Pty Ltd & Ors - [2005] SASC 281

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
CLONE PTY LTD v PLAYERS PTY LTD & ORS
Judgment of The Honourable Justice Vanstone
22 July 2005
LANDLORD AND TENANT - LEASES AND TENANCY AGREEMENTS - CONSTRUCTION AND INTERPRETATION
LANDLORD AND TENANT - TERMINATION OF THE TENANCY - FORFEITURE - NOTICE AND DEMAND BEFORE RE-ENTRY
LANDLORD AND TENANT - COVENANTS - AS TO REPAIR
TORTS - MISCELLANEOUS TORTS - INTERFERENCE WITH CONTRACTUAL RELATIONS
Dispute arising out of lease of premises to which tenant brought liquor and gaming licenses - whether lessor gave consent to lessee to remove licenses during currency of lease - whether consideration payable to lessor for licenses at end of lease term - whether lease to be read together with agreement to lease - form and content of agreement to lease upon execution - counterclaim by lessee for rectification of lease - lessor further claiming against second, third and fourth defendants for interference with contractual relations - counterclaim of same nature - whether lease was forfeited prior to expiry by reason of breach of maintenance convenants - parties seeking declaratory judgment pursuant to s 30B Supreme Court Act 1935.
Supreme Court Act 1935 s 30B; Liquor Licensing Act 1985 ss 65-72; Liquor Licensing Act 1997 ss 60-65; Gaming Machines Act 1992 s 15(i), s 14, s 19, s 28, s 34; Landlord and Tenant Act 1936 s 10, referred to.
Neill v Hewens (1953) 89 CLR 1; Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; Leggott v Barrett (18880) 15 ChD 306; Palmer v Johnson (1884) 13 QB 351; Ladbroke Group PLC & Anor v Bristol City Council [1988] 23 EG 125-128, discussed.
Briginshaw v Briginshaw (1938) 60 CLR 336; Kennedy v Verco (1960) 105 CLR 521; Australian Safeway Stores Pty Ltd v Toorak Development Village Pty Ltd [1947] VR 268, considered.

CLONE PTY LTD v PLAYERS PTY LTD & ORS
[2005] SASC 281
Civil
VANSTONE J:
Introduction

This dispute arises out of the lease of premises at 73-79 Pirie Street, Adelaide (“the property”). The lease was for a term of ten years. The permitted use of the property was as hotel, restaurant, gaming venue and nightclub. Towards the end of the term the Lessee sought permission from the Lessor to remove the hotel and gaming licences from the property, which course would be accommodated by provisions of the Memorandum of Lease. The Lessee claims that it received such permission and took steps to remove the licences. The Lessor claims that no such permission was given. Determination of that issue depends primarily upon the construction of letters passing between those parties. Each side seeks certain declarations in its favour, and other relief.
A further issue concerns the rights of the Lessor and Lessee respectively in relation to the ownership of the licences upon the (recent) expiration of the lease. That matter involves a dispute as to the terms of an Agreement to Lease (“the Agreement”) which was struck between the parties…

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: [2005] SASC 281
Decision Date: 22 July 2005

CaseChat Overview and Summary

Clone Pty Ltd initiated proceedings against Players Pty Ltd, as well as two other defendants, seeking declaratory relief regarding the rights and obligations under a lease agreement for premises used for gaming and liquor activities. The dispute centred on whether the lessor had consented to the removal of liquor and gaming licenses by the lessee during the term of the lease, whether consideration was to be paid to the lessor for these licenses at the end of the lease term, and whether the lease should be construed together with the agreement to lease. Additionally, the lessor claimed against the second, third, and fourth defendants for interference with contractual relations, while the lessee counterclaimed for rectification of the lease.

The court was required to interpret the lease agreement and the agreement to lease to determine the rights and obligations of the parties. The key issues included whether the lease was forfeited due to a breach of maintenance covenants and whether the lease and agreement to lease should be read together. The court also had to consider whether the lessee's counterclaim for rectification was valid and whether the lessor's claim against the additional defendants for interference with contractual relations was substantiated.

The court found that the lease and the agreement to lease were not to be read together, and therefore, the terms of the lease were to be considered in isolation. The court held that the lessor had not consented to the removal of the licenses by the lessee, and there was no requirement for consideration to be paid at the end of the lease term. The court further ruled that the lease had not been forfeited due to a breach of maintenance covenants. The counterclaim for rectification was dismissed as the lessee failed to demonstrate a clear error in the lease. Regarding the interference with contractual relations, the court found that there was no interference by the additional defendants.

The court made a declaration that the lease and agreement to lease were to be read separately, that the lessor had not consented to the removal of the licenses, and that there was no requirement for consideration to be paid. The court also declared that the lease had not been forfeited due to a breach of maintenance covenants, and the counterclaim for rectification was dismissed. Finally, the court found that there was no interference with contractual relations by the additional defendants.

Orders