Higgs v. Wilson Pacific Pty Ltd
[2004] QSC 51
•17/03/2004
[2004] QSC 51
SUPREME COURT OF QUEENSLAND
CIVIL JURISDICTION
FRYBERG J
No BS1571 of 2004
| VALERIA MARIA HIGGS | Plaintiff |
| and | |
| WILSON PACIFIC PTY LTD and JOHN ROBERT FISHWICK and | First Defendant Second Defendants |
BRISBANE
..DATE 17/03/2004
ORDER
HIS HONOUR: This is an application for summary judgment by the first defendant. It seems from the evidence that the first defendant is the landlord and the plaintiff, the tenant of a hairdressing salon at Main Beach. I say, "it seems", because the lease which is referred to by all deponents is not actually in evidence. No satisfactory explanation for its absence has been given. But it seems likely that it does or, at least, did exist since stamp duty was paid on it.
Drafts of the lease exist and are in the possession of the solicitors for the plaintiff and the defendant and have been exhibited. The evidence so far as is relevant to the clauses with which this application is concerned, is that the drafts were not materially altered and that the clauses as set out in the standard form REIQ Terms and Conditions were applicable.
The lease commenced around about the 19th of March 2001. The plaintiff had a short rent free period during which she outfitted the premises and the lease then provided for a term of three years following by three options, each of three years.
A period of 12 years gave the plaintiff a sense of security, a sense which I completely understand. She would have wanted such a sense since she had been trying to get this lease organised for a year or more. Her efforts had involved changing the planning requirements for the use of the premises with the Gold Coast Council, a task which would not have been easy. And she had expended some $50,000 in outfitting the premises for her hairdressing salon.
It is clear from her evidence - and I should say that I have heard her give evidence orally and be cross-examined as well as having the benefit of her affidavit - that she was not a person who, herself, was concerned to pay attention in detail to the contents of documents such as leases.
Like most people, she was concerned to get on with running her business and she told me she left these sorts of things largely to her husband, although she was meticulous herself in ensuring payment of the rent. She signed the lease some months after she entered into possession of the premises and, several days apart, the two copies which she signed were sent by her to her solicitor and by him to the solicitors for the then landlords, the second defendants, who are not parties to the application today.
Those defendants or their solicitors were to have the lease stamped and executed and I presume that this occurred. No copy of it was sent back to the solicitors for the plaintiff, despite several requests by them to the solicitors for the second defendants. In the middle of 2002, the second defendants sold the premises to the first defendant. At various times after that, the solicitors for the plaintiff made two requests of the solicitors for the first defendant for a copy of the lease and an oral request was also made by the plaintiff to an employee of the first defendant. No copy was provided.
The plaintiff testified that she knew that she had three options and her understanding of "options" was that they meant that the lease automatically continued but that the rent was liable to be increased and that she would receive a notice notifying her of the new amount of the rent. There is no evidence that this belief was communicated to the first defendant. I accept that this was her belief, notwithstanding that the statement of claim which has been delivered suggests that there is an estoppel based on a belief that the relationship of landlord and tenant continued until 2007 with options thereafter. There is no adequate explanation for that assertion in the statement of claim.
The three years of the period of the lease appear to have passed amicably enough, although there was an issue which arose about insurance and the plaintiff wrote, or perhaps her husband drafted a letter which she signed, denying liability for insurance on the basis of the terms of the lease. There has been an affidavit by her husband in which he deposes to a conversation which occurred between Christmas and New Year of 2003-2004. In that conversation, the principal of the first defendant enquired whether the plaintiff would be receptive to being bought out of her lease in order for him to give vacant possession to a buyer, thereby suggesting that the first defendant had the belief that the plaintiff was secure in her tenancy for some time to come. I would be prepared, for present purposes, to infer that that was so on the basis, however, that the first defendant would have assumed that the option would be exercised.
The relationship was, as I have said, a friendly one. There were Christmas drinks, and a toast was proposed and the terms of it were to the effect that the plaintiff was a good tenant.
It does not seem to me that that was misleading; given the plaintiff's attention to paying the rent, it was probably true.
It is perhaps unfortunate that Mr Higgs did not refer in his affidavit to having written the letter in which reference is made to the lease because that letter does seem to indicate possession of a copy of the terms of the lease. There is no explanation of how precise references to clause 7 came to be in that letter in the material before me.
In fact the terms of the lease required that the option be exercised by the 18th January 2004. In her ignorance the plaintiff did nothing. On the 21st January the first defendant wrote to the solicitors for the plaintiff and to the plaintiff, advising that the period for exercise of the option had expired and giving notice that he would require the plaintiff to vacate the premises when the lease expired two months later.
In those circumstances I would be prepared to infer for the purposes of this application that the first defendant was well aware that the option period had been running and that the plaintiff had not exercised the option. It was the two month period over Christmas, of course, and it would seem at least an open inference which could be explored at a trial that the first defendant knowingly stood silent and hoped that the plaintiff would not exercise the option either through ignorance or forgetfulness or for whatever reason.
As soon as the plaintiff became aware of the letter, she spoke to her solicitor and he immediately gave notice of exercise of the option. This, being out of time, was not accepted by the first defendant and it is not, as I understand the argument, now suggested that the notice was valid. That is undoubtedly correct.
The case for the plaintiff is pleaded in a number of ways. First it is asserted that there is an implied term in the lease that the first defendant should have delivered a copy of the lease to the plaintiff. I am prepared to assume in the plaintiff's favour the existence of such a term and that it is binding on the first defendant, that is to say that it is a term which runs with the land.
It seems to me that that really makes no difference. If the first defendant was in breach of such a term, an arguable case has not been demonstrated that that breach was causative of any failure by the plaintiff to exercise the option. Had the lease been provided at some earlier time, I am not satisfied that there is any evidence or any prospect of there being evidence that it would have made any difference to what in fact happened.
The plaintiff simply was not aware of the need to exercise the option. She had had the terms of the lease in her possession at an earlier time and had not noted the need then and indeed had completely misunderstood what was required. I have no evidence which would suggest that had she given it to her husband, anything different would have happened from what did happen.
The estoppel which is pleaded in paragraph 21 is based on an alleged assumption which, as I have said, is not made out by the evidence before me. Even if the paragraph were to be amended, it does not seem to me that the assumption which the plaintiff did make has been induced by the first defendant.
The first defendant was certainly friendly to the plaintiff. The first defendant indicated a belief that there would be a substantial period of the term to run based, as I have said, in all probability on the assumption that the option would be exercised. The first defendant did not provide a copy of the lease. But even taking those things together, it does not seem to me that facts have been demonstrated which arguably are sufficient to create an estoppel as pleaded.
The alternative way in which the case is put is on the basis of the Trade Practices Act, misleading and deceptive conduct. That is not very different, in the circumstances of the case, from the estoppel argument. It does not seem to me that there is any prospect of the plaintiff demonstrating the necessary causal link between any conduct of the first defendant or any omission of the first defendant on the one hand and the plaintiff's failure to exercise the option.
I have great sympathy for the plaintiff. In all probability she has through her own ignorance of the requirements of the contract, lost the value of a lease which would have been most useful to her. She has lost the value of the money which she has invested in the premises and of the work and effort which she put in to getting the Town Planning consent.
The fact is, however, that there is an overwhelming case that this was due to her misunderstanding of the nature of an option and of the need to exercise it. It was within her power to ascertain the information necessary, since her solicitors held copies of the relevant documents and had within their file all of the information necessary to establish the dates on which the option had to be exercised. Had she inquired of the solicitors, the information could have been provided to her. She did not, as I have said, no doubt because of her belief as to the nature of an option.
In my view, the plaintiff has no prospect of making good her claim within the meaning of Rule 293(2)(a) and no other reason has been shown to demonstrate the need for a trial. In my view, to allow the matter to proceed would simply be to burden the plaintiff with a large amount of costs for a trial which would inevitably end in failure on her part. It would be throwing good money after bad.
Despite the very considerable sympathy which I have for the plaintiff, in my judgment the application must be granted and there should be judgment for the first defendant.
MR LILLY: Your Honour, I ask for costs of this application and of the application for an injunction.
...
HIS HONOUR: The applicant, the first defendant, seeks an order for costs. It has succeeded in the claim and the ordinary rule is that the costs should follow the event. The submission made by the plaintiff in that respect is essentially a plea for my sympathy, because the first defendant has stood by and allowed the option period to run and thereby allowed the plaintiff to be put in the position in which she finds herself. That plea certainly wins my sympathy, but unfortunately I do not think that it allows me to depart from the rules which control the exercise of the discretion as to costs, and particularly the notion that costs will follow the event.
There must be judgment for the first defendant with costs of the action and the applications to be assessed.
MR LILLY: Your Honour, I've also been instructed to ask for an order that the plaintiff deliver up possession.
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HIS HONOUR: Upon the undertaking of the first defendant by its counsel not to charge or to refund rent as the case may require for two weeks of the period from now to 17th April 2004, order by consent that the plaintiff deliver up possession of the land referred to in the claim on or before 17th April 2004.
HIS HONOUR: Is that satisfactory, Mr Ulrick?
MR ULRICK: Yes. Thank you, your Honour.
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