Gazcorp Pty Ltd v Woolworths Group Ltd - [2021] NSWSC 308

Supreme Court

New South Wales

Medium Neutral Citation: Gazcorp Pty Ltd v Woolworths Group Ltd [2021] NSWSC 308
Hearing dates: 22-25 February 2021; 1-2 March 2021
Date of orders: 30 March 2021
Decision date: 30 March 2021
Jurisdiction: Equity
Before: Darke J
Decision:
Declaration made that Agreement for Lease is no longer on foot.

Catchwords:
CONTRACTS – discharge by frustration – agreement for lease – landlord agrees to carry out Landlord’s Works to construct shopping centre and grant lease of part of shopping centre to tenant – development consent obtained – whether agreement varied so as to incorporate a department store – held that agreement was varied – development application for revised shopping centre refused – appeal against refusal dismissed – held that agreement as varied was frustrated
CONTRACTS – discharge by abandonment – agreement for lease – agreement made in 2008 – lengthy period during which landlord was not carrying out Landlord’s Works and tenant was not calling upon landlord to perform – certain rights of tenant under contract expired – development consent authorising the Landlord’s Works due to lapse in February 2014 – inference drawn that parties had mutually agreed to abandon agreement by about the beginning of 2014
CONTRACTS – discharge by frustration – agreement for lease – Landlord’s Works authorised by a development consent – common assumption that Landlord’s Works would continue to be able to be carried out lawfully – neither party contractually responsible for maintaining that state of affairs – common assumption proves to be mistaken when development consent lapsed – agreement held to have been frustrated

Legislation Cited:
Sydney Local Environmental Plan 2012 (NSW), cl 7.23

Cases Cited:
Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143
Chinatex (Australia) Pty Limited v Bindaree Beef Pty Limited [2018] NSWCA 126
Clifton v Kerry J Investment Pty Ltd [2020] FCAFC 5
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Davis Contractors Ltd v Fareham Urban District Council [1959] AC 696
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
Greencapital Aust Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd [2019] NSWCA 53
Humphrey & Edwards v City of Sydney [2009] NSWLEC 1075
Masters v Cameron (1954) 91 CLR 353
oOH! Media Roadside Pty Ltd v Diamond Wheels Pty Ltd (2011) 32 VR 255; [2011] VSCA 116
Ryder v Frohlich [2004] NSWCA 472
Técnicas Reunidas SA v Andrew [2018] NSWCA 192

Category: Principal judgment
Parties: Gazcorp Pty Ltd (Plaintiff)
Woolworths Group Ltd (Defendant)
Representation:
Counsel:
Mr M J Darke SC with Mr C McMeniman (Plaintiff)
Ms M Cairns with Ms A Reid (Defendant)
Solicitors:
Back Schwartz Vaughan (Plaintiff)
Clayton Utz (Defendant)

File Number(s): 2018/314968
Publication restriction: None

Judgment

Introduction

These proceedings concern two adjoining blocks of land in Alexandria, near Green Square Station. The land is owned by the plaintiff, Gazcorp Pty Ltd (“Gazcorp”). The blocks are located at 284-300 Wyndham Street and at 296-298 Botany Road.
Gazcorp was…

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: [2021] NSWSC 308
Decision Date: 30 March 2021

CaseChat Overview and Summary

Gazcorp Pty Ltd, a property developer, brought an action against Woolworths Group Ltd, a tenant, for breach of an agreement for lease. The agreement stipulated that Gazcorp would construct a shopping centre and lease part of it to Woolworths. The agreement was made in 2008, but development was delayed, and the development consent expired in 2014. Woolworths argued that the agreement was frustrated due to the development consent lapsing, and that the parties had mutually agreed to abandon the agreement. Gazcorp contended that Woolworths was in breach of the agreement by not calling upon Gazcorp to perform. The court had to determine whether the agreement was frustrated or if Woolworths was in breach of the agreement.
The court held that the agreement was varied to include a department store, which was subsequently frustrated when the development consent lapsed. The court found that the agreement had been frustrated due to the development consent lapsing, and the parties had mutually agreed to abandon the agreement. The court held that the agreement was frustrated when the development consent lapsed, and there was no evidence of any breach of contract by Woolworths. The court found that the agreement was frustrated and that Woolworths was not in breach of the agreement.
The court held that the agreement was frustrated and dismissed the appeal against the refusal of the development application for the revised shopping centre. The court held that the agreement as varied was frustrated, and there was no evidence of any breach of contract by Woolworths. The court found that the parties had mutually agreed to abandon the agreement by about the beginning of 2014, and the agreement was frustrated due to the development consent lapsing. The court dismissed Gazcorp’s claim for breach of contract against Woolworths.

Orders