Hemer Pty Ltd v Benni

Case [2010] SASC 242

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

HEMER PTY LTD v BENNI & ORS

[2010] SASC 242

Judgment of The Honourable Justice Vanstone

6 August 2010

LANDLORD AND TENANT - COVENANTS - ACTIONS FOR BREACH OF COVENANT - GENERALLY

LANDLORD AND TENANT - TERMINATION OF THE TENANCY - FORFEITURE - NOTICE AND DEMAND BEFORE RE-ENTRY

LANDLORD AND TENANT - TERMINATION OF THE TENANCY - FORFEITURE - RELIEF AGAINST FORFEITURE

Dispute arising over a covenant in a lease agreement requiring payment by the plaintiff of rates and taxes proportional to the land leased - the plaintiff sought relief against forfeiture of the lease - the plaintiff acknowledged it was in breach of the lease agreement but contended that by failing to enforce the lease and give sufficient notice of the breach the defendants had elected to maintain the lease and consequently waived the breach - whether the institution of proceedings in the Magistrates Court or further demands to comply with the covenant constituted an election to maintain the lease - whether the defendants' notification of the breach sufficiently complied with the legislation - whether the defendants' re-entry was effective.

Held:  there was no occasion to elect as between inconsistent rights and no question of waiver of rights arising from the breaches - no ground upon which to grant relief against forfeiture - summons dismissed.

Real Property Act 1886 (SA), s 125, s 126; Landlord and Tenant Act 1936 (SA), s 10, s 11, referred to.
Consolidated Development Pty Ltd v Holt (1986) 6 NSWLR 607; Howells v Permanent Trustee Company of NSW Ltd (1956) 73 WN (NSW) 347; Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; Fox v Jolly [1916] 1 AC 1; Ex parte Dally-Watkins; Re Wilson (1955) 72 WN (NSW) 454; McDrury v Luporini [2000] 1 NZLR 652; Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2010] NSWSC 29; Rose v Spicer [1911] 2 KB 234; Shiloh Spinners Ltd v Harding [1973] AC 691; Sparta Nominees Pty Ltd v Orchard Holdings Pty Ltd [2002] WASC 54; Legione v Hateley (1983) 152 CLR 406; Leads Plus Pty Ltd v Kowho Intercontinental Pty Ltd (2000) 10 BPR 18,085, discussed.

HEMER PTY LTD v BENNI & ORS
[2010] SASC 242

Civil

VANSTONE J:

Introduction

  1. The plaintiff seeks relief against forfeiture of a lease over a small parcel of suburban land, which takes in part of the land of the first and second defendants and part of the adjoining land of the third defendant, as well as various related declarations, including as to the interpretation of a covenant in the lease requiring payment by the plaintiff of some part of the rates and taxes levied on each title.

    Background

  2. Except where otherwise indicated, the following facts are common ground and I make findings in terms of them.  On 11 September 2006 the plaintiff company settled the purchase of a house property at Glen Osmond.  The land it acquired…

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Hemer Pty Ltd v Benni [2010] SASC 242
Case
[2010] SASC 242
Decision Date

CaseChat Overview and Summary

The case of Hemer Pty Ltd v Benni involves a dispute between a tenant, Hemer Pty Ltd, and its landlords, Benni, Ridge, and Collins, over a covenant in a lease agreement that required Hemer Pty Ltd to pay rates and taxes proportional to the land leased. Hemer Pty Ltd sought relief against forfeiture of the lease, arguing that it was in breach of the lease agreement but that by failing to enforce the lease and give sufficient notice of the breach, the landlords had elected to maintain the lease and consequently waived the breach. The landlords argued that they had properly enforced the covenant and that Hemer Pty Ltd's re-entry was ineffective.

The legal issues in this case were whether the institution of proceedings in the Magistrates Court or further demands to comply with the covenant constituted an election to maintain the lease, whether the landlords' notification of the breach sufficiently complied with the legislation, and whether the landlords' re-entry was effective. The court had to determine whether the landlords had properly enforced the covenant and whether Hemer Pty Ltd's re-entry was effective.

The court held that the landlords had properly enforced the covenant and that Hemer Pty Ltd's re-entry was ineffective. The court found that the landlords had given Hemer Pty Ltd sufficient notice of the breach and that the institution of proceedings in the Magistrates Court did not constitute an election to maintain the lease. The court also found that the landlords' re-entry was effective, as Hemer Pty Ltd had not established that the landlords had waived the breach. The court dismissed Hemer Pty Ltd's claims and ordered that the summons be dismissed. The court will hear the parties as to costs.

Orders

Orders of the court

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Background

Background to the litigation

The plaintiff seeks relief against forfeiture of a lease over a small parcel of suburban land, which takes in part of the land of the first and second defendants and part of the adjoining land of the third defendant, as well as various related declarations, including as to the interpretation of a covenant in the lease requiring payment by the plaintiff of some part of the rates and taxes levied on each title.Background Except where otherwise indicated, the following facts are common ground and I make findings in terms of them. On 11 September 2006 the plaintiff company settled the purchase of a house property at Glen Osmond. The land it acquired adjoined that of several other persons. They included the first and second defendants, who were the registered proprietors of a vacant block; the third defendant who also owned an adjoining vacant block; and a Mr Tucker who lived in a house on land adjoining the allotments of both the plaintiff and the third defendant Ms Collins. The second defendant, Mr Ridge, did not give evidence in this trial. At all relevant times his co-owner, Ms Benni, the first defendant, has spoken for both of them. I shall refer to that land as “Ms Benni’s land”. Mr Blight represented all three defendants at trial. The plaintiff’s purchase also gave it the benefit of a registered lease, number 2365604, over part of the land of Ms Benni and Ms Collins. (Their land had been divided into two allotments since the lease was granted. There was a separate lease over part of Mr Tucker’s land, which I assume was in similar terms.) The lease was originally between a Mr Turner as lessor and a Mr Chapman as lessee. The parties are respectively the successors in title to the original lessor and lessee, at least in part. The lease was for a term of 99 years, commencing on 1 July 1962. The rental, payable on demand, was one shilling per annum. The lease is a concise document. It does not appear to have been drawn with any expertise. The dispute in this matter centres on the second of two covenants within it. I set out the terms of the lease:MEMORANDUM OF LEASEI, IAN STANMORE TURNER of 22 Godfrey Terrace, Leabrook, Architectural Draughtsman, being registered as the proprietor of an estate in fee simple subject however to such encumbrances liens and interests as are notified by Memorandum underwritten or endorsed hereon in the whole (Memorandum of Transfer dated 30/6/62 from ROBERT CHARLES CHAPMAN to myself being portion of) of the land comprised in / Certificate of Title Volume 2745 Folio 182 being Lot No. 71SUBJECT nevertheless to rights of way and easements to the Minister of Works as thereon mentionedDO HEREBY LEASE to ROBERT CHARLES CHAPMAN OF 61 Sunnyside Road, Glen Osmond, Company Director, that portion of the said land above described marked “D” in the plan attached hereto and coloured red SUBJECT nevertheless to a Right-of-Way and easement to the Minister of Works over portion of the land shown in the said plan attached and marked ‘Easement’ to be held by the said Robert Charles Chapman for a term of ninety nine years commencing from 1/7/62 expiring on the 30th day of June in the year Two thousand and sixty one at an annual rental of ONE SHILLING (1/-) payable on demand SUBJECT to the following covenants:-THE LESSEE HEREBY AGREES THAT(1)the said land hereby leased shall be used wholly and solely for the purpose of a garden and for no other purpose whatsoever(2)if demanded by the lessor rates and taxes proportional to the land herein leased are to be the responsibility of the lessee.I, the abovenamed ROBERT CHARLES CHAPMAN do hereby accept this lease of the above described land to be held by me as lessee and subject to the conditions restrictions and covenants above set forth.(signing clauses)It is the obligation imposed in the second covenant which has led to these proceedings.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Accordingly, had I considered it to be necessary and appropriate to give my view as to the correct interpretation of the lease, it would have been to this effect. In the circumstances, I do not propose to make any declaration.Conclusion The plaintiff has not succeeded in any of its claims. The summons is dismissed. I shall hear the parties as to costs.

Ratio Decidendi

Legal Principle Established

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