Grepo v Jam-Cal Bundaberg Pty Ltd - [2015] QCA 131

SUPREME COURT OF QUEENSLAND

CITATION:

Grepo & Anor v Jam-Cal Bundaberg Pty Ltd [2015] QCA 131

PARTIES:

FRANK GREPO & BERYL DOROTHY GREPO
(appellants)
v
JAM-CAL BUNDABERG PTY LTD
ACN 089 493 550
(respondent)

FILE NO/S:

Appeal No 6131 of 2014
SC No 514 of 2013

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Cairns – [2014] QSC 119

DELIVERED ON:

17 July 2015

DELIVERED AT:

Brisbane

HEARING DATE:

24 February 2015

JUDGES:

Holmes and Morrison JJA and Douglas J
Separate reasons for judgment of each member of the Court, Holmes JA and Douglas J concurring as to the orders made, Morrison JA dissenting in part

ORDERS:

1. The appeal is allowed.

2. The judgment below is set aside, and it is ordered that there be judgment for the appellants for recovery of possession of premises at 1 Ray Road Mareeba described as Lot 874 on CP NR 4546, County of Nares, Parish of Tinaroo, Title Reference 20945056.

3. The respondent is to pay the appellants’ costs of the appeal and the proceeding at first instance.

CATCHWORDS:

LANDLORD AND TENANT – RENT – PROVISIONS AS TO RENT IN AGREEMENT FOR LEASE OR LEASE – RENT REVIEW CLAUSES – where the lease provided for rent review after the first year, either by way of market review or review based on the consumer price index – where the lessee paid rent at the base rate for the whole of the three year term – where the lessor argued that the lessee was required to calculate the rent payable in accordance with the consumer price index – where the lessee argued that the obligation to pay any increase was dependent on a determination being made by the lessors – whether the terms of the lease required a determination to be made – whether the trial judge erred in failing to find that the lessee was in breach of its obligation to pay rent

LANDLORD AND TENANT – COVENANTS – OTHER COVENANTS – where the lease prohibited the accumulation of rubbish on the premises – where the lessors argued that there was photographic evidence of an unacceptable accumulation of tyres – where there was no evidence as to when the photographs were taken – whether the trial judge erred in failing to find that the lessee was in breach of the lease

LANDLORD AND TENANT – COVENANTS – NOT TO ASSIGN OR SUBLET – LESSOR’S CONSENT – where the lease prohibited the lessee from underletting the premises without the lessors’ prior consent – where the permitted use of the premises was as a wrecking business – where the lessee rented a granny flat which was part of the premises to an employee without the lessors’ permission – where the lessee argued that the tenant was a caretaker and that his occupation of the flat was ancillary to the permitted use of the premises – whether the trial judge erred in failing to find that the lessee’s underletting of the…

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: [2015] QCA 131
Decision Date: 17 July 2015

CaseChat Overview and Summary

Grepo v Jam-Cal Bundaberg Pty Ltd involved a dispute between the appellants, Grepo, the landlords, and the respondents, Jam-Cal Bundaberg, the tenants. The central issues in the case revolved around various breaches of the lease agreement by the tenants, including failure to review rent as specified, accumulation of rubbish, unauthorized subletting, failure to address pest infestation, and the exercise of an option to renew the lease. The landlords sought relief from forfeiture and recovery of possession of the premises.

The legal issues before the court included whether the tenants were required to calculate rent based on the consumer price index, whether the tenants breached the lease by accumulating rubbish, whether the tenants breached the lease by subletting without permission, whether the tenants breached the lease by failing to address a pest infestation, and whether the tenants were entitled to relief from forfeiture despite breaches of the lease. Additionally, the court needed to determine the point at which the option to renew the lease was exercised and whether the protective provisions of s 128 of the Property Law Act 1974 (Qld) applied to breaches occurring after the tenants gave notice of their intention to exercise the option.

The court found that the tenants were indeed required to calculate the rent based on the consumer price index as outlined in the lease agreement. The court also held that the tenants breached the lease by accumulating rubbish, subletting without permission, and failing to address a pest infestation. The court further determined that the option to renew the lease was exercised at the time the tenants gave notice, but before the expiration of the lease term. The court concluded that s 128 of the Property Law Act 1974 (Qld) did not apply to breaches that occurred after the tenants gave notice of their intention to exercise the option. The court found that while certain equitable rights were created by the notice of intention to exercise the option, these rights were limited and contingent upon the tenants fulfilling their obligations under the lease.

ORDERS:
1. The appeal is allowed.
2. The judgment below is set aside, and it is ordered that there be judgment for the appellants for recovery of possession of the premises at 1 Ray Road Mareeba.
3. The respondent is to pay the appellants’ costs of the appeal and the proceeding at first instance.
4. The respondent is to pay the appellant $3,893.43 (including GST) for arrears of rent.

Orders

Orders of the court

1. The appeal is allowed.

2. The judgment below is set aside, and it is ordered that there be judgment for the appellants for recovery of possession of premises at 1 Ray Road Mareeba described as Lot 874 on CP NR 4546, County of Nares, Parish of Tinaroo, Title Reference 20945056.

3. The respondent is to pay the appellants’ costs of the appeal and the proceeding at first instance.

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

It may be accepted that certain equitable rights are created upon the giving of the notice by the lessee. However, the nature and scope of those rights depends on the proper construction of the clause under which they are said to arise. The extent to which equity might lend relief could be quite limited, and is likely to be so where the lessee still has obligations which must be precisely performed as a condition of exercising the option.Conclusion I agree with the orders proposed by Holmes JA, except in that in addition I would order that the respondent pay the appellant $3,893.43 (including GST) for arrears of rent. DOUGLAS J: I agree with the reasons of Holmes JA and the orders proposed by her Honour. I also agree with Morrison JA’s remarks on the construction of s 128(4) of the Property Law Act 1974 (Qld). These additional remarks are intended to explain why I agree with Holmes JA and not with Morrison JA in respect of whether the lessee had failed to pay rent in breach of the lease. The dictionary definitions of “determination” in this context contemplate an action leading to a result. For example, the online edition of the Oxford English Dictionary definitions include:“6aThe action of definitely ascertaining the position, nature, amount, etc. (of anything). …bThe result ascertained by this action; that which has been determined by investigation or calculation; a conclusion, a solution.”Similarly, the online edition of the Macquarie Dictionary refers to “a result ascertained; a solution … the fixing or settling of amount, limit, character, etc. …”. Those meanings are consistent with the derivation or calculation of the sum by the application of cl 3.2.1(b) of the lease to arrive at the result of a rental figure for the second and each subsequent lease year. The definition of “Index Number” in the lease, however, covers more possibilities than the comparison of one consumer price index figure for Brisbane with an earlier such figure. In the absence of such an index the definition provides eventually for the setting of an appropriate figure by a third party. The full definition is:“2.1.7‘Index Number’ means the Consumer Price Index (All Groups) for the city of Brisbane as published by the Australian Bureau of Statistics. If that index is suspended, discontinued, or modified so that it does not reflect on a consistent basis changes which have occurred in the cost of living in the city of Brisbane during any Lease Year, the expression will mean an index which in the opinion of the Australian Statistician (whether published or advised at the request of either party) does reflect on a consistent basis changes which have occurred in the cost of living in the City of Brisbane during any Lease Year. If the Australian Statistician has not published and will not advise an appropriate index, the expression will mean an index or method of measuring increases in the cost of living agreed in writing by the parties and in default of agreement within a period of fourteen (14) days, an index or method determined at the request of either party by the President or Acting President of the Australian Institute of Valuers & Land Economists (Qld Division) or their nominee.”

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Grepo & Anor v Jam-Cal Bundaberg Pty Ltd [2015] QCA 131
PARTIES:	FRANK GREPO & BERYL DOROTHY GREPO (appellants) v JAM-CAL BUNDABERG PTY LTD ACN 089 493 550 (respondent)
FILE NO/S:	Appeal No 6131 of 2014 SC No 514 of 2013
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Cairns – [2014] QSC 119
DELIVERED ON:	17 July 2015
DELIVERED AT:	Brisbane
HEARING DATE:	24 February 2015
JUDGES:	Holmes and Morrison JJA and Douglas J Separate reasons for judgment of each member of the Court, Holmes JA and Douglas J concurring as to the orders made, Morrison JA dissenting in part
ORDERS:	1. The appeal is allowed. 2. The judgment below is set aside, and it is ordered that there be judgment for the appellants for recovery of possession of premises at 1 Ray Road Mareeba described as Lot 874 on CP NR 4546, County of Nares, Parish of Tinaroo, Title Reference 20945056. 3. The respondent is to pay the appellants’ costs of the appeal and the proceeding at first instance.
CATCHWORDS:	LANDLORD AND TENANT – RENT – PROVISIONS AS TO RENT IN AGREEMENT FOR LEASE OR LEASE – RENT REVIEW CLAUSES – where the lease provided for rent review after the first year, either by way of market review or review based on the consumer price index – where the lessee paid rent at the base rate for the whole of the three year term – where the lessor argued that the lessee was required to calculate the rent payable in accordance with the consumer price index – where the lessee argued that the obligation to pay any increase was dependent on a determination being made by the lessors – whether the terms of the lease required a determination to be made – whether the trial judge erred in failing to find that the lessee was in breach of its obligation to pay rent LANDLORD AND TENANT – COVENANTS – OTHER COVENANTS – where the lease prohibited the accumulation of rubbish on the premises – where the lessors argued that there was photographic evidence of an unacceptable accumulation of tyres – where there was no evidence as to when the photographs were taken – whether the trial judge erred in failing to find that the lessee was in breach of the lease LANDLORD AND TENANT – COVENANTS – NOT TO ASSIGN OR SUBLET – LESSOR’S CONSENT – where the lease prohibited the lessee from underletting the premises without the lessors’ prior consent – where the permitted use of the premises was as a wrecking business – where the lessee rented a granny flat which was part of the premises to an employee without the lessors’ permission – where the lessee argued that the tenant was a caretaker and that his occupation of the flat was ancillary to the permitted use of the premises – whether the trial judge erred in failing to find that the lessee’s underletting of the…