Construction Technologies Australia Pty Ltd v Doueihi (No 4)

The matter before the court was an appeal against a decision to grant specific performance to enforce an equitable estoppel. The appellant, Construction Technologies Australia Pty Ltd (CTA), sought to enforce an equity arising by estoppel against the respondents, the Doueihi family. The primary judge had found that CTA was entitled to specific performance of the lease terms as negotiated between the parties. The central legal issue was whether specific performance of the lease should be granted, considering the absence of a mistaken belief as to legal rights, the incompleteness of the agreed terms, and CTA's perceived carelessness in protecting its own interests. The court had to determine whether these factors should preclude the grant of specific performance.

The court held that none of the factors mentioned militated against granting specific performance. The court found that CTA had a legitimate expectation that it would be granted a lease on the terms negotiated. The absence of a mistaken belief as to legal rights did not preclude the grant of specific performance, as the court considered the parties' conduct and negotiations. The incompleteness of the agreed terms did not prevent specific performance, as the court was able to fill in the gaps based on the parties' negotiations and the surrounding circumstances. The perceived carelessness of CTA did not preclude specific performance, as the court found that the respondents had taken advantage of CTA's reliance on the negotiations. The court concluded that the appropriate equitable relief was specific performance to make good the assumption that CTA was induced to adopt.

The court ordered that CTA and the respondents execute a lease on the terms negotiated between the parties. The lease was to be for a term of five years from 18 May 2010 with an option for renewal for a further five-year term. The rent for the first five-year term was to be $12,000 per month inclusive of outgoings, with CTA paying for electricity and consumables and services in the same way as it had to date. If the option for renewal was exercised, the rent for the renewed lease was to be the then market rent as agreed or determined by valuation and be subject to annual increases in accordance with the Consumer Price Index. The court also ordered that the lease contain usual lease covenants for factory premises that in default of agreement be determined by an expert to be appointed for that purpose. The court further ordered that CTA undertake promptly to do all things necessary on its part to obtain all necessary regulatory approvals to its occupation of the site and its manufacturing facility, with the costs of obtaining such approvals to be borne by CTA.