Flagstaff v Cross Street - [1999] NSWSC 999

Reported Decision: [1999] 9 BPR 17,067
[1999] NSW ConvR 55-920

New South Wales

Supreme Court

CITATION: Flagstaff v Cross Street [1999] NSWSC 999

CURRENT JURISDICTION: Equity

FILE NUMBER(S): 3041 of 1999

HEARING DATE(S): 15 September 1999

JUDGMENT DATE:
30 September 1999

PARTIES :

Flagstaff Investments Pty Ltd (Plaintiff)
Cross Street Investments Pty Ltd (Defendant)

JUDGMENT OF: Windeyer J at 1

COUNSEL : Mr N C Hutley SC with him Mr M A Jones (Plaintiff)
Mr S Epstein (Defendant)

SOLICITORS: Corrs Chambers Westgarth (Plaintiff)
Baron & Associates (Defendant)

CATCHWORDS: LANDLORD AND TENANT - Leases - option to renew - breach of covenant after notice of intention to renew - compliance with covenants to expiry condition precedent to right to new lease - effect of s133E of Conveyancing Act - purported exercise of option - when occurring - competing single judge decisions - Agreements for lease - when leases under s129 of Conveyancing Act - s128 of Act - requirement for term to have commenced; LAW REFORM - Conveyancing Act ss133E-133G - need for amendment

ACTS CITED: Conveyancing (Amendment) Bill, 1972
Conveyancing Act 1919 ss128, 129, 133E, 133E(2), 133G
New South Wales Law Reform Commission Options in Leases (LRC5 1968)
Stuckey, The Conveyancing Act 2nd ed Law Book Company, Sydney (1969) para 590

CASES CITED: B.S. Stillwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd [1970] VR 589
Bass Holdings Limited v Morton Music Limited [1988] Ch 493
Beca Developments Pty Ltd v Idameneo (No. 92) Pty Ltd (1989) NSW ConvR. 55-459
Brennan v Kinjella [1993] NSW ConvR 55-677
Caltex Properties Pty Ltd v Pittard (1991) ANZ ConvR 612
Finch v Underwood [1876] 2 ChD 310
Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Limited (1959) 59 SR (NSW) 122
Greville v Parker [1910] AC 335
Hayes v Gunbola Pty Ltd [1988] NSW ConvR 55-375
Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd [1998] NSW ConvR 55-861
MacDonald v Robins (1954) 90 CLR 515
Nessmine Pty Ltd v Devuzo Pty Ltd [1989] NSW ConvR. 55-496
Rethmeier v Pioneer House Pty Ltd [1970] NSW ConvR. 55-516
Spectra Pty Ltd v Pindari Pty Ltd [1974] 2 NSWLR 617
Sperry Rand Australia Ltd v Arrandale Properties Pty Ltd [1979] VR 409
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

DECISION: No entitlement to new lease. Summons dismissed.

1
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
WINDEYER J
THURSDAY 30 SEPTEMBER 1999
3041/99 FLAGSTAFF INVESTMENTS PTY LTD v CROSS STREET INVESTMENTS PTY LTD
JUDGMENT
Question for decision
1 This action requires the court to determine whether s133E of the Conveyancing Act 1919 bears upon the entitlement of a lessee to a new lease pursuant to an option where a breach of covenant occurs after notice of exercise is given.
Facts
2 Flagstaff Investments Pty Ltd (Flagstaff) is the lessee of shop 24 in the Georges Centre in Cross Street Double Bay, pursuant to lease registered number 20804448. That lease as originally granted was in respect…

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.

Continue reading Flagstaff v Cross Street

Details

AGLC: Flagstaff v Cross Street [1999] NSWSC 999
Case: [1999] NSWSC 999
Decision Date: 30 September 1999

CaseChat Overview and Summary

In the case of Flagstaff v Cross Street, the dispute arose between Flagstaff, the landlord, and Cross Street, the tenant, concerning the terms of a lease agreement and the tenant's option to renew. The matter was heard in the Supreme Court of New South Wales. The primary issue before the court was whether the tenant's purported exercise of an option to renew was valid, particularly given the breach of covenants post-notice of intention to renew and the requirement for compliance with covenants as a condition precedent to the right to a new lease.

The court was tasked with interpreting the relevant provisions of the Conveyancing Act, specifically sections 133E, 133F, and 133G, to determine the effective date of the tenant's option to renew. The court considered the competing single judge decisions on the matter and sought to resolve the discrepancies. It also examined whether the agreements for lease should be classified as leases under section 129 of the Act and whether the requirement for the term to have commenced under section 128 was satisfied. Furthermore, the court assessed the necessity for amendments to sections 133E to 133G of the Conveyancing Act to provide clarity in similar future disputes.

The court found that the tenant's exercise of the option to renew was not effective due to the breach of covenants after the notice was given. The court held that compliance with the covenants was a condition precedent to the tenant's right to a new lease. It also concluded that the agreements for lease did not constitute leases under section 129 of the Act until the term had commenced. The court emphasised the need for legislative amendments to sections 133E to 133G of the Conveyancing Act to address the uncertainty and conflicting interpretations in similar cases. The court ultimately determined that the tenant's option to renew was not valid, and no new lease was granted.

Orders