Kegran Pty Ltd v Warrik Pty Ltd - [2018] NSWSC 1357

Supreme Court

New South Wales

Medium Neutral Citation: Kegran Pty Ltd v Warrik Pty Ltd [2018] NSWSC 1357
Hearing dates: 21-22 August 2018
Date of orders: 03 September 2018
Decision date: 03 September 2018
Jurisdiction: Equity
Before: Darke J
Decision:
Plaintiff has validly exercised option to renew lease. Orders made for specific performance of the agreement to grant new lease.

Catchwords: LAND LAW – leases – notice of exercise of option to renew lease – service of written notice of exercise required – service by email sufficient if email received by person with authority – presumption in s 161 of the Evidence Act 1995 (NSW) that email communication was received at the destination to which it appears from the document to have been sent – provision in lease about modes of service is facultative not mandatory – notice held to have been served in accordance with requirements of lease
Legislation Cited: Evidence Act 1995 (NSW), s 161
Cases Cited: FAI General Insurance Company Ltd (in liquidation) v Parras (2002) 55 NSWLR 498; [2002] NSWCA 334
Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716
Papantoniou v Stonewall Hotel Pty Ltd [2018] NSWCA 85
Spectra Pty Ltd v Pindari Pty Ltd [1974] 2 NSWLR 617
Spencer v Bamber [2012] NSWCA 274
Category: Principal judgment
Parties: Kegran Pty Ltd (Plaintiff)
Warrik Pty Ltd (Defendant)
Representation:
Counsel:
Mr S Balafoutis with Ms F St. John (Plaintiff)
Mr J Foley (Defendant)
Solicitors:
HBL Business & Property Lawyers (Plaintiff)
S G Legal Services Pty Ltd (Defendant)

File Number(s): 2017/379766
Publication restriction: None

Judgment

Introduction

The matter in dispute in these proceedings is whether the plaintiff has validly exercised an option to renew a lease over certain motel premises in Port Macquarie. The plaintiff seeks a declaration to the effect that it has duly exercised the option, and an order for specific performance of the agreement to grant the new lease.
The lease was granted by the defendant as lessor to certain individuals as lessee for a five year term commencing on 1 March 2010, with options for five further terms of five years each. The lease was registered as lease AF361361. In about December 2011 the lease was transferred to the plaintiff as lessee.
Apart from certain specified variations, the lease was on the same terms as an earlier registered lease of the premises, namely registered lease AB489864.
The option to renew is contained in clause 21, which relevantly provides:

21.1   If the Tenant:
(1)   wishes to lease the Premises for the further term stated in Item 15 of the Reference Schedule;
(2)   gives notice to that effect to the Landlord not less than 6 months before the Termination Date; and
(3)   at the date of giving notice and at the Termination Date, is not in default under this Lease;
the Landlord will grant a lease of the Premises (“further lease”) to the Tenant upon the same terms and conditions as this Lease but subject to variations which are necessary in…

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: [2018] NSWSC 1357
Decision Date: 03 September 2018

CaseChat Overview and Summary

Kegran Pty Ltd sought a declaration that it had validly exercised an option to renew a lease for premises in Mascot, NSW. Warrik Pty Ltd, the landlord, argued that the notice of exercise was invalidly served. The dispute was heard in the Supreme Court of New South Wales. The court needed to determine whether the notice of exercise of the option to renew was validly served and if the service complied with the requirements of the lease agreement. The court considered whether the notice, sent via email, was sufficiently served as per the lease terms and whether the presumption in section 161 of the Evidence Act 1995 (NSW) applied.

The court found that the notice was validly served because it was sent to the person with authority over the premises, as per the lease agreement. The court held that the presumption in section 161 of the Evidence Act 1995 (NSW) applied, meaning the email communication was presumed to have been received at the destination indicated. The court also noted that the clause in the lease regarding modes of service was facultative, not mandatory, and thus, the email service was sufficient. The court concluded that the notice was served in accordance with the lease requirements and held that the option to renew was validly exercised.

The court ordered that Kegran Pty Ltd had validly exercised the option to renew the lease for the premises in Mascot, NSW. The court also ordered Warrik Pty Ltd to execute a renewal lease in accordance with the terms of the original lease, including the option to renew. The court further ordered that the lease be extended for the term specified in the option to renew, and that the terms and conditions of the original lease apply to the renewed lease.

Orders