Jong v Advanced Dental Services Pty Ltd

Case [2019] NSWCA 318

Court of Appeal


Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: Jong v Advanced Dental Services Pty Ltd [2019] NSWCA 318
Hearing dates: 13 November 2019
Date of orders: 20 December 2019
Decision date: 20 December 2019
Before: Basten JA at [1];
Meagher JA at [39];
Brereton JA at [53]
Decision:

(1)   Dismiss the appeal.

 (2)   Order that the appellant pay the respondent’s costs in this Court.
Catchwords: LANDLORD AND TENANT – renewals and options – exercise of option – commercial premises – whether email exchange constituted exercise of option – relevance of subsequent conduct – whether absence of further guarantee required by lease precluded enforceable agreement
Legislation Cited: Conveyancing Act 1919 (NSW), ss 127, 170
Real Property Act 1900 (NSW), s 41
Cases Cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Ballas v Theophilos [No 2] (1957) 98 CLR 193; [1957] HCA 90
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61
Carter v Hyde (1923) 33 CLR 115; [1923] HCA 36
Chan v Cresdon Pty Ltd (1989) 168 CLR 242; [1989] HCA 63
Gerraty v McGavin (1914) 18 CLR 152; [1914] HCA 23
Hagerty v Hills Central Pty Ltd [2018] NSWCA 200
Prudential Assurance Co Ltd v Health Minders Pty Ltd (1987) 9 NSWLR 673
Quadling v Robinson (1976) 137 CLR 192
Young v Lamb [2001] NSWCCA 225; (2001) 10 BPR 18,553
Texts Cited: J D Heydon, Heydon on Contract (2019, Lawbook Co)
Category:Principal judgment
Parties: Yeeh Yong Jong (Appellant)
Advanced Dental Services Pty Ltd (Respondent)
Representation:

Counsel:
Mr J-J Loofs SC (Appellant)
Mr A Joseph (Respondent)

  Solicitors:
Coleman Greig Lawyers (Appellant)
PDC Lawyers & Planners (Respondent)
File Number(s): 2019/165333
 Decision under appeal 
Court or tribunal:
District Court
Jurisdiction:
Civil
Date of Decision:
6 May 2019
Before:
Wass SC DCJ
File Number(s):
2017/190600

headnote

[This headnote is not to be read as part of the judgment]

The appellant, Ms Jong, owned premises at Blackwall Street, Woy Woy. On 27 May 2009 she let the premises to MJ Jong Pty Ltd; the lease was later assigned to the respondent, Advanced Dental Services Pty Ltd. The lease was for a term of five years, terminating on 26 May 2014, with two options to renew for periods of five years. The lease also contained provisions requiring that the lessee have a guarantor.

On 6 January 2014, the appellant wrote to the principal of the respondent via email, noting that the lease was expiring shortly, there was an option to renew for 5 years and the time frame in which the option was required to be exercised. The appellant requested that the respondent advise “immediately if you are re-signing for another 5 years or if you wish to vacate at that time”. The respondent replied on the same day that he “would like to renew…

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AGLC
Jong v Advanced Dental Services Pty Ltd [2019] NSWCA 318
Case
[2019] NSWCA 318
Decision Date

CaseChat Overview and Summary

The appeal concerned a dispute between a landlord, Advanced Dental Services Pty Ltd, and a tenant, Jong, regarding the exercise of an option to renew a commercial lease. The primary issue was whether an email exchange between the parties constituted a valid exercise of the option, thereby creating an enforceable agreement for a renewed lease.

The Court of Appeal was required to determine whether the email sent by the tenant, which referred to the lease and indicated an intention to renew, satisfied the formal requirements for exercising the option as stipulated in the lease agreement. Further, the court had to consider the relevance of subsequent conduct by both parties and whether the absence of a further guarantee, which the lease contemplated but was not explicitly demanded in the renewal communication, precluded the formation of a binding agreement.

The Court of Appeal found that the email exchange, viewed in light of the surrounding circumstances and the parties' subsequent conduct, demonstrated a clear intention by the tenant to exercise the option to renew the lease. The court held that the lease did not mandate that the tenant's communication must explicitly address the provision of a further guarantee for the renewal to be effective. The subsequent conduct of the parties, including the landlord's acceptance of rent at the renewed rate, further supported the conclusion that a binding agreement for renewal had been formed.

The appeal was dismissed, and the appellant was ordered to pay the respondent’s costs in the Court of Appeal.

Orders

Orders of the court

(1) Dismiss the appeal.

(2) Order that the appellant pay the respondent’s costs in this Court.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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