Holus Bolus Pty Ltd v The Wicko Pty Ltd - [2012] NSWSC 497

Supreme Court

New South Wales

Medium Neutral Citation: Holus Bolus Pty Ltd v The Wicko Pty Ltd [2012] NSWSC 497
Hearing dates: 26.03.12; 27.03.12
Decision date: 16 May 2012
Before: Nicholas J
Decision:
Par 50

Catchwords: LANDLORD AND TENANT - construction of hotel lease - works required for compliance with fire safety standards under Building Code of Australia - whether works "of a structural nature" - question of fact and degree - no question of general principle
Legislation Cited: Environmental Planning and Assessment Act 1979
Cases Cited: Brew Bros. Ltd v Snax (Ross) Ltd [1970] 1 QB 612
Di Francesco & Ors v Blantrix Pty Ltd & Ors [2004] NSWLEC 669
R v Lowe (1954) 19 LGR (NSW) 345
Wates v Rowland [1952] 2 QB 12
Category: Principal judgment
Parties: Holus Bolus Pty Ltd - plaintiff
The Wicko Pty Ltd - defendant
Representation: Counsel:
K Andronos/D Tynan - plaintiff
P A Regattieri - defendant
Solicitors:
Colquhoun Murphy Solicitors - plaintiff
Braye Cragg Solicitors - defendant

File Number(s): 09/290755

Judgment

By its amended statement of claim filed 20 December 2011 the plaintiff seeks declaratory relief, an order for specific performance, and damages arising from the defendant's failure to carry out fire safety works at the Terminus Hotel, Quirindi (the hotel) under a covenant contained in a lease dated 19 January 2004 between the defendant as lessor and the plaintiff as lessee.

The plaintiff is a family company of which the directors and shareholders are Mr Simon Lewis and his wife, Mrs Jane Lewis. Mr Lewis is the licensee.

The defendant is, and has been since about January 2008, the registered proprietor of the land on which the hotel is situated. Until about April 2004 the registered proprietor was Mr Lloyd Frater, and between about April 2004 and about January 2008 the registered proprietor was Sonspur Pty Ltd.

The premises at which the hotel is conducted comprises a public bar, accommodation including 14 units of five single rooms, three double rooms, one twin room, one triple room, and four family rooms. It also includes a restaurant licensed to seat 140 people, and a beer garden. It is a three storey building.

By letter of 20 April 2007 the Liverpool Plains Shire Council (the council) notified the plaintiff of the requirement to carry out works in compliance with the fire safety provisions under the Building Code of Australia (the code), failing which the plaintiff would be ordered to cease conducting accommodation activities on the premises. A revised list of fire safety works (the works) was served on the defendant by the council by letter of 16 June 2011. By letter of 20 January 2012 the council informed the defendant of its intention to issue an order requiring completion of the works within a specified time. These requirements underlie the principle issue in these proceedings which is whether the works are of a structural nature within cl 12.2 of the lease and, accordingly, are works which the defendant is obliged to perform.

Background

On…

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: [2012] NSWSC 497
Decision Date: 16 May 2012

CaseChat Overview and Summary

Holus Bolus Pty Ltd brought an action against The Wicko Pty Ltd, the lessee of a hotel, concerning the interpretation of a hotel lease. The dispute centred on the lessee's obligation to carry out works required for compliance with fire safety standards under the Building Code of Australia. The issue at hand was whether the works constituted "structural alterations" within the meaning of the lease, thereby relieving the lessee of liability for such works. The case was heard in the Supreme Court of New South Wales.

The central legal issue before the court was the interpretation of the term "structural alterations" in the context of the lease. The court needed to determine whether the works mandated by the Building Code of Australia constituted "structural alterations" that would exempt the lessee from liability under the lease agreement. The court had to consider the ordinary meaning of the term "structural alterations" and whether it encompassed the works required by the Building Code.

In delivering the judgment, the court emphasised that the determination of whether the works were "structural alterations" was a question of fact and degree. The court observed that the term "structural alterations" did not lend itself to a precise definition and was context-dependent. The court held that the question of whether the works required for compliance with the Building Code constituted "structural alterations" was not a question of general principle but rather a matter of factual determination. The court found that the works in question were not "structural alterations" within the meaning of the lease, and therefore, the lessee was liable for the costs associated with those works.

The court ordered that The Wicko Pty Ltd was liable for the costs associated with the works required for compliance with the Building Code of Australia. The court rejected the lessee's argument that the works were "structural alterations" and, therefore, not within its responsibility under the lease. The judgment clarified the scope of the lessee's obligations regarding compliance with fire safety standards and reinforced the importance of precise drafting in lease agreements.

Orders