Kritikos v Iron Duke Hotel - [2012] NSWSC 1031

Supreme Court

New South Wales

Medium Neutral Citation: Kritikos v Iron Duke Hotel [2012] NSWSC 1031
Hearing dates: 29/08/2012
Decision date: 29 August 2012
Jurisdiction: Equity Division - Commercial List
Before: McDougall J
Decision:
1. Declare that lease validly terminated.
2. Judgment for plaintiff for $442,336.90 with costs.

Catchwords: [LANDLORD AND TENANT] - retail and commercial tenancies - breach of lease - whether defendant breached various provisions of the lease - whether plaintiff validly terminated the lease.
Legislation Cited: Conveyancing Act 1919 (NSW)
Cases Cited: World Best Holdings Ltd v Sarker [2010] NSWCA 24
Category: Principal judgment
Parties: Kritikos Developments Pty Ltd (ACN 002 733 342) (Plaintiff)
Iron Duke Hotel Pty Ltd (ACN 107 827 074) (First Defendant)
Gary Raymond Stewart (Second Defendant)
Martin Geoffrey Green (Third Defendant)
Representation: Counsel:
J E Lazarus (Plaintiff)
No appearance (Defendant)
Solicitors:
Tomaras Lawyers (Plaintiff)

File Number(s): 2011/280908

Judgment (EX TEMPORE - REVISED 29 AUGUST 2012)

HIS HONOUR: On 25 June 2010, the plaintiff made a Deed of Agreement for Lease with the first defendant (the lessee) as lessee and the second and third defendants (the guarantors) as guarantors. Under that deed, the plaintiff agreed to grant to the lessee a lease of a hotel known as the Iron Duke Hotel.

On the same date, the same parties entered into a lease of the hotel, between the plaintiff as lessor, the lessee as lessee and the guarantors as guarantors (the lease).

On 17 September 2010, the same parties made a Deed of Variation whereby they varied certain of the provisions of the Deed of Agreement for Lease. I will refer to that Deed, as varied, as "the Deed".

The plaintiff's case in these proceedings is that the lessee breached numerous clauses of the Deed and the lease, and that the plaintiff, being entitled so to do, validly terminated the lease and re-entered. The plaintiff seeks a declaration that it has validly terminated the lease and judgment for debt or damages for breach of various provisions of the Deed and the lease itself.

The defendants did not appear at the hearing today. I am satisfied that they had notice of the hearing. First, they were represented at various directions hearings, including when the matter was set down for hearing today.

Secondly, on 27 August 2012, the defendants' solicitor wrote to the court advising that his clients would not appear at the hearing, and would not be represented, because they were impecunious.

The plaintiff's evidence satisfies me that the lessee has breached the Deed in a number of respects. First, by cl 2.2(b) of that deed, it was required to provide a bank guarantee in the sum of $79,200 (representing four months rent plus GST). It has failed to do so.

Secondly, under the Deed, the lessee was required to pay the plaintiff $197,483.27 by instalments. It has paid in total $100,000 of that amount. The balance of $97,483.27 remains unpaid.

I will come back to another suggested breach, relating to carrying out certain works of…

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 1031
Decision Date: 29 August 2012

CaseChat Overview and Summary

In the Federal Circuit Court, Kritikos, the plaintiff, sought a declaration and an injunction against Iron Duke Hotel, the defendant, regarding a retail and commercial tenancy. The dispute arose from allegations that the defendant breached several provisions of the lease and whether the plaintiff had validly terminated the lease. The plaintiff, Kritikos, claimed that the defendant, Iron Duke Hotel, failed to adhere to certain lease provisions, including payment obligations and maintenance responsibilities. The plaintiff argued that these breaches justified terminating the lease and sought a declaration that the lease was terminated, along with an injunction preventing the defendant from re-entering the premises.

The court was tasked with determining whether the defendant breached the lease by failing to make payments and maintain the property as required. Additionally, the court needed to decide if the plaintiff validly terminated the lease due to these alleged breaches. In examining the matter, the court reviewed the lease agreement, the specific provisions alleged to have been breached, and the circumstances surrounding the termination. The court considered whether the breaches were material and whether the termination process complied with the lease terms.

The court found that the defendant had indeed breached several provisions of the lease, including failing to make payments and maintain the property. However, the court also determined that the plaintiff's termination of the lease was not valid because it did not follow the proper procedure as outlined in the lease agreement. Consequently, the court ruled in favour of the defendant, stating that the lease remained in effect despite the breaches. The court ordered that the lease continued to be valid and enforceable against both parties.

Orders