Juniper Property Holdings No. 15 Pty Ltd v. Crewlodge Pty Ltd
[2007] QSC 145
•18 June 2007
SUPREME COURT OF QUEENSLAND
CITATION:
Juniper Property Holdings No. 15 Pty Ltd v Crewlodge Pty Ltd [2007] QSC 145
PARTIES:
JUNIPER PROPERTY HOLDINGS NO. 15 PTY LTD ACN 099 125 274
(applicant)
v
CREWLODGE PTY LTD ACN 078 682 934
(respondent)FILE NO/S:
BS 3416 of 2007
DIVISION:
Trial Division
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
18 June 2007
DELIVERED AT:
Brisbane
HEARING DATE:
14 June 2007
JUDGE:
Mackenzie J
ORDER:
A declaration that the Notice of Redevelopment and Surrender of Lease dated 22 December 2006 issued by the applicant to the respondent in respect of premises known as shop F3, shops F4/5 and shops F6/7 of “Raptis Plaza”, Cavill Avenue and The Esplanade, Surfers Paradise Queensland is a valid Notice pursuant to clause 62 of the lease of those premises by the respondent from the applicant dated 30 October 2000.(i)
A declaration that the Notice of Redevelopment and Surrender of Lease dated 22 December 2006 issued by the applicant to the respondent in respect of premises known as shop F9 of “Raptis Plaza”, Cavill Avenue and The Esplanade, Surfers Paradise Queensland is a valid Notice pursuant to clause 62 of the lease of those premises by the respondent from the applicant dated 30 October 2000.(ii)
A declaration that by virtue of the delivery of the Notice of Redevelopment and Surrender of Lease referred to in paragraph (i) above by the applicant to the respondent, the applicant is entitled to require the respondent to surrender to the applicant all of its right, title and interest in the lease referred to in paragraph (i) above as at and from 23 June 2007.(iii)
A declaration that by virtue of the delivery of the Notice of Redevelopment and Surrender of Lease referred to in paragraph (ii) above by the applicant to the respondent, the applicant is entitled to require the respondent to surrender to the applicant all of its right, title and interest in the lease referred to in paragraph (ii) above as at and from 23 June 2007.(iv)
The respondent pay the applicant’s costs of and incidental to the application, to be assessed. (v)
CATCHWORDS:
LANDLORD AND TENANT – LEASES AND TENANCY AGREEMENTS – CONSTRUCTION AND INTERPRETATION – OTHER MATTERS – where clause in commercial lease provided for surrender of premises “where vacant possession is required for redevelopment” – where applicant sought and received approval for amended development application – where notice to surrender lease was served on the respondent – where respondent commenced proceedings in the Planning and Environment Court seeking a declaration that approval of the amended development application was invalid – whether the demised premises were ‘required for development’ – whether the outcome of the Planning and Environment Court proceeding is relevant to deciding the present application
Commissioners of Inland Revenue v Southend-on-Sea Estates Company Ltd [1915] AC 428, cited
Schenker & Co (Aust) Pty Ltd v Maplas Equipment [1990] VR 834, distinguished
COUNSEL:
H Fraser QC, with D S Piggott, for the applicant
D R Gore QC for the respondent
SOLICITORS:
Deacons Lawyers for the applicant
Home Wilkinson Lowry for the respondent
MACKENZIE J: This is an application for declarations that Notices of Redevelopment and Surrender of Lease dated 22 December 2006, issued in relation to shops occupied by the respondent in Raptis Plaza at Surfers Paradise, are valid notices pursuant to clause 62 of leases granted to the respondent by the applicant. Declarations are also sought that, by virtue of the delivery of the notices, the applicant is entitled to require the respondent to surrender all right, title and interest under the leases as and from 23 June 2007. Clause 62.1 of each lease provides:
“The Lessor may by giving not less than 6 months notice in writing to the Lessee require the Lessee to surrender to the Lessor all its right title and interest in and to this Lease and the Demised Premises and any right to require the Lessor to Grant to the Lessee any renewal or extension of this Lease in any one of the following events: -
a. where vacant possession is required for redevelopment; and
b. where vacant possession is required for redevelopment by a new owner if the Land is sold or ownership change hand.”
The words emphasised are those upon which the issue between the parties has arisen.
The chronology, so far as it is relevant, is that a development approval was granted by Gold Coast City Council for the site on 18 September 2005. On 27 July 2006, a Request to Change an Existing Development Approval and Conditions of Approval was made to the Gold Coast City Council. The changes were approved on 28 September 2006.
On 22 December 2006, Notices of Redevelopment and Surrender of Lease were served by the applicant on the respondent. The respondent did not execute the Deed of Surrender of Lease and surrender of the lease contemplated by clauses 62.3 and 62.5 within the required time, or at all. On 20 April 2007, the present originating application was filed. Then, on 11 May 2007, the respondent commenced proceedings in the Planning and Environment Court, seeking a declaration that the decision made by the Gold Coast City Council approving the changes to the development application is invalid.
It was common ground that it was not necessary for the merits of the application to the Planning and Environment Court to be examined in these proceedings. Essentially the question for determination is whether the Notices of Redevelopment and Surrender of Lease are valid on the basis that vacant possession of the demised premises was “required for redevelopment” within the true interpretation of clause 62.1. Although the applicant’s written outline develops arguments concerning the meaning of “redevelopment”, the meaning of that term was not put in issue in the respondent’s outline of argument. It was also common ground that clause 62 was part of a commercial transaction and should be given commercial operation to reflect the parties’ intent (cf Schenker & Co (Aust) Pty Ltd v Maplas Equipment [1990] VR 834, 840).
It was also not disputed that the applicant’s material established that, at the time the notices were given, it was then intending to redevelop the site pursuant to the amended development application of 28 September 2006. However the respondent did not accept that that concluded the issue of whether vacant possession of the demised premises was “required for redevelopment”. It was submitted that it would only be so if the outcome of the proceedings in the Planning and Environment Court is irrelevant.
If it is not irrelevant, and the development approval of 28 September 2006 is invalid, several issues would present themselves in connection with various scenarios which Senior Counsel for the respondent listed as follows:
(i) whether, as a matter of fact, the applicant could physically and feasibly develop the site in accordance with the original development application;
(ii) whether, as a matter of fact, the applicant would develop the site in accordance with the original development application;
(iii) whether, for the purposes of clause 62.1, vacant possession was required for redevelopment in accordance with the original development application; and
(iv) whether vacant possession can be required under clause 62.1 for a non-existent approval.
If, however, the applicant’s primary contention is correct, there is no need to consider those issues. What is contended by Senior Counsel for the applicant is that the future result of the proceedings in the Planning and Environment Court is irrelevant to the question whether the applicant had given notice complying with clause 62.1. It is not required by clause 62.1 that when the notices given, the applicant must be lawfully entitled immediately to redevelop, or to do so in accordance with any particular approval. Therefore, it is irrelevant to the operation of the provision that an existing approval is challenged after the notice is given or an existing approval is later found to be invalid.
It was further submitted on behalf of the applicant that the power in clause 62.1 is properly exercised if, when the notice is given, the applicant then, in fact, requires vacant possession of the land for redevelopment 6 months or more after the notice for its then intended redevelopment (Commissioners of Inland Revenue v Southend-on-Sea Estates Company Ltd [1915] AC 428). The applicant’s rights and the respondent’s obligations under clause 62 accrued on 22 December 2006, when the applicant gave the notices. The subsequent challenge to the amended development approval and any result of the challenge have no bearing upon satisfaction of the requirements of clause 62.1 in December 2006.
Clause 62.1 is premised, relevantly, on vacant possession being required for redevelopment. Clause 62.2 provides for reasonable compensation for loss or damage suffered by a lessee as a result of the surrender of a lease in consequence of service of a notice under section 62.1. When this kind of scheme is construed in a commercial contract to ascertain the intent of the parties, the most logical construction is that, in a case where the requisite notice was given at a time when there was a bona fide intention to redevelop the land, the parties intended that the lessor’s right to vacant possession and the lessee’s right to reasonable compensation would crystallise at that time.
In this case, it is conceded that, at the time when the notices were served, there was a bona fide intention to use the land for the purpose of redevelopment in accordance with the amended development permit. It may be added that, at that time, there was no apparent impediment to proceeding with the development. If some subsequent event, whether caused by nature or in consequence of some form of human activity supervenes and the intended redevelopment does not proceed, it would run counter to commercial expectations that the parties would thereafter be reinstated to their former rights and obligations. Commencement of proceedings to challenge the development approval after a notice had been given could not undo its effect.
It would also be counter to such expectations that a lessee who preferred not to have his lease terminated could claim to be entitled to the benefit of the lease where there had been a bona fide but subsequently frustrated intention to develop which formed the basis of the notice. And it would be counter to commercial expectations that a lessee who had made other arrangements in reliance on the notice might be at risk of being deprived of his right to reasonable compensation or being subjected to obligations under the lease when the redevelopment did not proceed.
Having regard to the particular circumstances in which the right to give a notice was exercised, I am satisfied that, on the proper construction of clause 62.1, the declarations sought should be made. In view of the construction placed on the relevant clause, it is not necessary to explore what the consequences might be of serving notices in circumstances where there was more attenuated intention to develop, or the status of a pre-existing development approval if the amended development approval were to be declared invalid by the Planning and Environment Court.
The following declarations and orders are made:
(i) A declaration that the Notice of Redevelopment and Surrender of Lease dated 22 December 2006 issued by the applicant to the respondent in respect of premises known as shop F3, shops F4/5 and shops F6/7 of “Raptis Plaza”, Cavill Avenue and The Esplanade, Surfers Paradise Queensland is a valid Notice pursuant to clause 62 of the lease of those premises by the respondent from the applicant dated 30 October 2000.
(ii) A declaration that the Notice of Redevelopment and Surrender of Lease dated 22 December 2006 issued by the applicant to the respondent in respect of premises known as shop F9 of “Raptis Plaza”, Cavill Avenue and The Esplanade, Surfers Paradise Queensland is a valid Notice pursuant to clause 62 of the lease of those premises by the respondent from the applicant dated 30 October 2000.
(iii) A declaration that by virtue of the delivery of the Notice of Redevelopment and Surrender of Lease referred to in paragraph (i) above by the applicant to the respondent, the applicant is entitled to require the respondent to surrender to the applicant all of its right, title and interest in the lease referred to in paragraph (i) above as at and from 23 June 2007.
(iv) A declaration that by virtue of the delivery of the Notice of Redevelopment and Surrender of Lease referred to in paragraph (ii) above by the applicant to the respondent, the applicant is entitled to require the respondent to surrender to the applicant all of its right, title and interest in the lease referred to in paragraph (ii) above as at and from 23 June 2007.
(v) The respondent pay the applicant’s costs of and incidental to the application, to be assessed.
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