Gigi Entertainment Pty Ltd v Schmidt - [2013] NSWCA 287

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Gigi Entertainment Pty Ltd v Schmidt [2013] NSWCA 287
Hearing dates: 8 July 2013
Decision date: 05 September 2013
Before: Beazley P at [1]
Ward JA at [2]
Sackville AJA at [99]
Decision:
1. Appeal dismissed with costs.
2. Order 1 of the orders made by the Registrar of the Court of Appeal on 16 May 2013 be vacated.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
LANDLORD AND TENANT - measure for calculation of loss of bargain damages on termination of lease for breach of an essential term - where owner takes possession and carries on business itself as entitled to do under the lease
EVIDENCE - whether expert evidence rejected by trial judge on the grounds of relevance should have been admitted as going to potential basis for calculation of loss of bargain damages
Legislation Cited: Liquor Act 2007
Cases Cited: Baker v The Queen [1975] 1 AC 774
Buchanan v Byrnes [1906] HCA 21; (1906) 3 CLR 704
Castle Constructions Pty Ltd v Fekala Pty Ltd [2006] NSWCA 133; (2006) 65 NSWLR 648
Chief Executive Officer of Customs v Tony Longo Pty Limited [2001] NSWCA 147; (2001) 52 NSWLR 458
CSR Limited v Eddy [2005] HCA 64; (2005) 226 CLR 1
Eleftheriou v Water Board [1991] NSWCA 91
Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; (2007) 230 CLR 89
Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market (Campbelltown) Pty Ltd [2008] HCA 10, (2008) 234 CLR 237
Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351
Lamson Store Service Co Ltd v Russell Wilkins & Sons Ltd [1906] HCA 87; (1906) 4 CLR 672
Luxer Holdings Pty Ltd v Glentham Pty Ltd [2007] WASCA 209; (2007) 35 WAR 254
Markisic v Commonwealth of Australia [2007] NSWCA 92; (2007) 69 NSWLR 737
McGlone v Kalgold [2011] QCA 215
Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17
Suttor v Gundowda [1950] HCA 35; (1950) 81 CLR 418
Willis v Commonwealth [1946] HCA 22; (1946) 73 CLR 105
Texts Cited: P Butt, The Standard Contract for Sale of Land in New South Wales (1985), at 665
McGregor on Damages 17th ed, 2003, Sweet & Maxwell, London
Category: Principal judgment
Parties: Gigi Entertainment Pty Ltd (Appellant)
Michael Karl Schmidt (Respondent)
Representation: Counsel:
D Pritchard SC with J S Emmett (Appellant)
S Robertson with Ms F Ashworth (Respondent)
Solicitors:
Holman Webb Lawyers (Appellant)
McAuley Hawach Lawyers (Respondent)

File Number(s): CA 13/124310
Decision…

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: [2013] NSWCA 287
Decision Date: 05 September 2013

CaseChat Overview and Summary

Gigi Entertainment Pty Ltd (the appellant) appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court of New South Wales concerning the calculation of loss of bargain damages following the termination of a retail lease. The dispute arose after the landlord, Mr Schmidt (the respondent), took possession of the premises and continued to operate the business himself, as permitted by the lease, following Gigi Entertainment's breach of an essential term.

The primary legal issues before the Court of Appeal were whether the trial judge had erred in calculating the loss of bargain damages and whether expert evidence tendered by the appellant, which had been rejected by the trial judge as irrelevant, should have been admitted. The appellant contended that the expert evidence was relevant to establishing a basis for calculating the loss of bargain damages, particularly in light of the landlord's subsequent occupation and operation of the business.

The Court of Appeal, comprising Beazley P, Ward JA, and Sackville AJA, dismissed the appeal. The Court reasoned that the measure of loss of bargain damages in this context was the difference between the rent reserved by the lease and the market rent for the remainder of the term, and that the landlord's subsequent use of the premises did not alter this fundamental calculation. The Court found that the rejected expert evidence was not relevant to this established measure of damages and therefore upheld the trial judge's decision. The Court also vacated an earlier order made by the Registrar of the Court of Appeal.

Orders

Orders of the court

1. Appeal dismissed with costs.

2. Order 1 of the orders made by the Registrar of the Court of Appeal on 16 May 2013 be vacated.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Gigi Entertainment Pty Ltd v Schmidt [2013] NSWCA 287
Hearing dates:	8 July 2013
Decision date:	05 September 2013
Before:	Beazley P at [1] Ward JA at [2] Sackville AJA at [99]
Decision:	1. Appeal dismissed with costs. 2. Order 1 of the orders made by the Registrar of the Court of Appeal on 16 May 2013 be vacated. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	LANDLORD AND TENANT - measure for calculation of loss of bargain damages on termination of lease for breach of an essential term - where owner takes possession and carries on business itself as entitled to do under the lease EVIDENCE - whether expert evidence rejected by trial judge on the grounds of relevance should have been admitted as going to potential basis for calculation of loss of bargain damages
Legislation Cited:	Liquor Act 2007
Cases Cited:	Baker v The Queen [1975] 1 AC 774 Buchanan v Byrnes [1906] HCA 21; (1906) 3 CLR 704 Castle Constructions Pty Ltd v Fekala Pty Ltd [2006] NSWCA 133; (2006) 65 NSWLR 648 Chief Executive Officer of Customs v Tony Longo Pty Limited [2001] NSWCA 147; (2001) 52 NSWLR 458 CSR Limited v Eddy [2005] HCA 64; (2005) 226 CLR 1 Eleftheriou v Water Board [1991] NSWCA 91 Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; (2007) 230 CLR 89 Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market (Campbelltown) Pty Ltd [2008] HCA 10, (2008) 234 CLR 237 Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351 Lamson Store Service Co Ltd v Russell Wilkins & Sons Ltd [1906] HCA 87; (1906) 4 CLR 672 Luxer Holdings Pty Ltd v Glentham Pty Ltd [2007] WASCA 209; (2007) 35 WAR 254 Markisic v Commonwealth of Australia [2007] NSWCA 92; (2007) 69 NSWLR 737 McGlone v Kalgold [2011] QCA 215 Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17 Suttor v Gundowda [1950] HCA 35; (1950) 81 CLR 418 Willis v Commonwealth [1946] HCA 22; (1946) 73 CLR 105
Texts Cited:	P Butt, The Standard Contract for Sale of Land in New South Wales (1985), at 665 McGregor on Damages 17th ed, 2003, Sweet & Maxwell, London
Category:	Principal judgment
Parties:	Gigi Entertainment Pty Ltd (Appellant) Michael Karl Schmidt (Respondent)
Representation:	Counsel: D Pritchard SC with J S Emmett (Appellant) S Robertson with Ms F Ashworth (Respondent) Solicitors: Holman Webb Lawyers (Appellant) McAuley Hawach Lawyers (Respondent)
File Number(s):	CA 13/124310
Decision…