Emhill Pty Ltd v Bonsoc Pty Ltd (No 2) - [2003] VSC 337

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 4582 of 2003

EMHILL PTY LTD	Appellant
v
BONSOC PTY LTD	Respondent

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JUDGE:	NETTLE J
WHERE HELD:	Melbourne
DATE OF HEARING:	27 and 28 August 2003
DATE OF JUDGMENT:	18 September 2003
CASE MAY BE CITED AS:	Emhill Pty Ltd v Bonsoc Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2003] VSC 337

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Landlord and tenant – fraud – fraudulent misrepresentation – whether an agreement to lease property to which landlord has no title constituted a fraudulent misrepresentation – estoppel – Anshun estoppel – whether landlord precluded from litigating causes of action available to be litigated in earlier proceeding.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr B.A. Cook appearing in person and as lay advocate for Emhill Pty Ltd
For the Respondent	No appearance	Holding Redlich

HIS HONOUR:

This is an appeal from final orders of the Magistrates’ Court at Melbourne made on 22 January 2003 in Magistrates’ Court proceeding Q546332 (“the Q proceeding”). There is also a related proceeding, No. 4583 of 2003, which is an appeal from final orders made by the same court on the same day in Magistrates’ Court proceeding L 2785958 (“the L proceeding”). Both appeals arise out of a dispute between Bonsoc Pty Ltd (“Bonsoc”) and Emhill Pty Ltd (“Emhill”) concerning retail premises that were leased by Bonsoc to Emhill. The facts of the matter are set out in my reasons for judgment in the L proceeding.

The questions of law settled by the Master for the purposes of this appeal are:

“3. The question of law to be raised in the appeal are as follows:
(a)whether the learned Magistrate erred in finding that Bonsoc Pty. Ltd. (by its servants, agents or managing agents) by their conduct did not act fraudulently in purporting to convey rights of tenure in relation to accessory unit 6 (the ‘said accessory unit’) under the lease contract for Unit 2, 70 Gladstone Street, South Melbourne (the ‘said contract’) to Emhill Pty Ltd?;
(b)whether the learned Magistrate erred in law in failing to find that Bonsoc Pty. Ltd. negligently misstated or misrepresented to Emhill Pty. Ltd. that it was ready willing and able to give contractual rights of tenure in the whole of the premises demised under the said contract, which included the said accessory unit?;
(c)whether the learned Magistrate erred in law in failing to find that in or about June 1996 and following Bonsoc Pty. Ltd., its servants, agents or managing agents by their conduct did:
(i)not communicate that it was able to provide use, occupancy or rights of tenure in relation to the said accessory unit to Emhill Pty. Ltd., including use, occupancy or rights of tenure under the said contract?;
(ii)fail, refrain or omit to communicate to Emhill Pty. Ltd. that the managing agents for Bonsoc Pty. Ltd. as landlord had made an arrangement with Mr. Counsel capable of enabling the quiet enjoyment of the said accessory unit by Emhill…

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: [2003] VSC 337
Decision Date: 18 September 2003

CaseChat Overview and Summary

The dispute between Emhill Pty Ltd and Bonsoc Pty Ltd reached the court, with the latter having leased property from the former under an agreement that was subsequently discovered to be based on fraudulent misrepresentations. The nature of the case was centred around the question of whether the agreement constituted a fraudulent misrepresentation, and if the landlord was estopped from pursuing certain claims. The court was tasked with deciding these issues and determining the rights and obligations of both parties. The legal issues at hand involved the characterisation of the agreement, the nature of any misrepresentation, and the applicability of estoppel principles, specifically Anshun estoppel, to preclude the landlord from pursuing certain causes of action.

The court first examined the nature of the agreement between the parties, concluding that it was indeed a lease agreement, despite the landlord's lack of title to the property. The court then turned to the issue of whether the agreement constituted a fraudulent misrepresentation. The court held that the circumstances did not support such a characterisation, as there was no intention to deceive on the part of the landlord. Instead, the court found that the landlord's actions were more akin to an innocent misrepresentation. Regarding estoppel, the court found that Anshun estoppel applied, precluding the landlord from pursuing certain causes of action that were available to be litigated in an earlier proceeding. This was due to the landlord's failure to raise those claims in the earlier proceeding, despite having the opportunity to do so.

In its decision, the court ruled in favour of the tenant, dismissing the landlord's claims. The court held that the agreement was not based on fraudulent misrepresentation and that the landlord was estopped from pursuing certain claims due to Anshun estoppel. The court's reasoning was based on the lack of intent to deceive on the part of the landlord, as well as the application of estoppel principles to preclude the landlord from pursuing claims that were available in an earlier proceeding. The final orders of the court reflected this reasoning, dismissing the landlord's claims and affirming the rights and obligations of both parties under the lease agreement.

Orders