Darzi Group Pty Ltd v Nolde Pty Ltd

Darzi Group Pty Ltd (the appellant) and Nolde Pty Ltd (the respondent) were involved in a dispute concerning a lease agreement for certain premises. The core of the disagreement revolved around whether the parties had entered into a binding and enforceable agreement for a lease, specifically in the terms of a document dated 15 June 2016. The appeal was heard by Bathurst CJ, Basten JA, and Emmett AJA in the Court of Appeal of New South Wales.

The legal issues before the court included determining the significance of a Heads of Agreement and whether correspondence exchanged between the parties on 27 and 31 May 2016 indicated an intention to be bound by a contract. The court also considered the relevance of marking correspondence as "without prejudice" and whether the parties intended to be bound by the 15 June Document only upon the execution and exchange of a formal lease document. Furthermore, the applicability of the law of part performance to the question of contractual intention and the nature of the parties' conduct, whether consistent with the 15 June Document, a monthly tenancy, or a statutory lease under the *Retail Leases Act 1994* (NSW), were central to the appeal.

The Court of Appeal allowed the appeal, setting aside the orders made on 29 March 2019. The court declared that upon receipt of the respondent's letter dated 31 May 2016, the parties had entered into an agreement for the lease of the premises in the terms of the 15 June Document. The court reasoned that the correspondence, when viewed objectively, signified a binding agreement. Consequently, the respondent was ordered to execute the 15 June Document, attend to its stamping and registration, and provide the appellant with a certified copy. The court also made orders regarding the costs of the summons and the appeal.