Kelly v The Alternative Web Pty Ltd - [2010] SASC 4

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
KELLY & ANOR v THE ALTERNATIVE WEB PTY LTD
[2010] SASC 4
Judgment of The Honourable Justice Kourakis
20 January 2010
LANDLORD AND TENANT - LEASES AND TENANCY AGREEMENTS - CONSTRUCTION AND INTERPRETATION - SURROUNDING CIRCUMSTANCES
LANDLORD AND TENANT - LEASES AND TENANCY AGREEMENTS - SUBJECT MATTER OF LEASE - SUFFICIENCY OF DESCRIPTION
LANDLORD AND TENANT - TERMINATION OF THE TENANCY - GENERALLY
The defendant is the proprietor of land on part of which is a caravan park – the plaintiffs lease the portion of the land containing the caravan park – other parts of the land excluded from the lease so that the defendant might develop it as a villa complex – at the time the lease granted, parties also entered into a management agreement by which the plaintiffs would provide management services to the villa complex – villa complex development refused planning consent – parties dispute what parts of the land excluded from the lease – whether certain common areas of the land were excluded or whether the plaintiffs were granted exclusive occupation of those common areas – a term of the lease was that the plaintiffs not transfer the lease of the caravan park without defendant’s consent – whether agreement to sub-lease between the plaintiffs and a third party breached the lease – whether it follows that defendant’s Notice of Termination of the lease was effective – whether Notice of Termination ineffective for non-compliance with s 10 of the Landlord and Tenant Act 1936 – whether plaintiffs entitled to reimbursement for costs of repairing electricity and sewerage infrastructure of villa complex, for costs and expenses of maintenance of sewerage and effluent system and of ablution block of villa complex, and for expenses and work done in maintaining certain parts of villa complex land as a result of failure of villa complex development.
Held: Although common areas of the land excluded from the lease, plaintiffs were granted a licence to use those common areas – sub-lease agreement between plaintiffs and third party conditioned on the consent of the defendant – in any case, oral consent to the sub-lease agreement was given – therefore, defendant’s Notice of Termination of the lease ineffective – Notice of Termination also ineffective for failing to comply with s 10 of the Landlord and Tenant Act 1936 – pursuant to implied terms of lease and management agreement, plaintiffs entitled to be reimbursed for costs of repairing electricity and building infrastructure, but not costs of maintenance of sewerage and effluent system or ablution block – plaintiffs entitled to reimbursement for expenses and work done in maintaining parts of villa complex but only to the extent that work requested by the defendant with the promise of reimbursement.
Landlord and Tenant Act 1936 s 9, s 10, referred to.
Scala House and District Property Co Ltd v Forbes [1974] QB 575, considered.

KELLY & ANOR v THE ALTERNATIVE WEB PTY LTD
[2010] SASC 4
Civil
KOURAKIS J
Introduction

The parties…

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: [2010] SASC 4
Decision Date: 20 January 2010

CaseChat Overview and Summary

The case of Kelly v The Alternative Web Pty Ltd was heard in the Supreme Court of South Australia. The plaintiffs, Kelly, sought to prevent the defendant, The Alternative Web Pty Ltd, from terminating their lease agreement. The dispute centred around the interpretation of the lease agreement, the sufficiency of the description of the subject matter, and the termination of the tenancy.

The court had to determine whether the lease agreement was sufficiently clear and certain to be enforceable, particularly in light of the surrounding circumstances. Additionally, the court examined whether the plaintiffs had effectively surrendered the premises to the defendant, which would have resulted in the termination of the lease. The court also considered the implications of the plaintiffs’ payment of legal costs to avoid distraint of their goods, and whether this constituted a valid restitutionary claim.

In its reasoning, the court found that the lease agreement was sufficiently clear and certain to be enforceable, despite any ambiguities that may have existed. The court also determined that the plaintiffs had not surrendered the premises to the defendant, and therefore, the lease had not been terminated. The court dismissed the plaintiffs’ claim for restitution of the legal costs paid to avoid distraint, as the evidence did not support such a claim. The court concluded that the lease remained in effect and ordered that the parties be heard on the precise orders to be made and the final computation of their respective monetary claims.

The court's final orders included a declaration that the plaintiffs’ lease had not been terminated, a dismissal of the defendant’s claim that the plaintiffs give up possession, and an instruction for the parties to present their arguments on the precise orders to be made and the final computation of their respective monetary claims.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Whatever obstacle the Legal Practitioners Act 1981 presents for the enforcement of claims for legal costs before taxation,[19] the legal costs of the warrant were in fact paid by the plaintiffs to avoid the consequence of the distraint of their goods. The evidence does not disclose enough about the circumstances in which the payment was made to support the restitutionary claim now made by the plaintiffs. I dismiss their claim on this head.[19] See, generally, 4WD Pty Ltd v McNamara [2009] SASC 274; DA Starke Pty Ltd trading asStarke Lawyers v Yardoo Pty Ltd [2009] SASC 90.Conclusion I declare that the plaintiffs’ lease has not been terminated. I dismiss the defendant’s claim that the plaintiffs give up possession. I will hear the parties on the precise orders which should be made and on the final computation of their respective monetary claims.

Ratio Decidendi

Legal Principle Established

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