Landsmiths Pty Ltd v Hall - [1999] NSWSC 735

CITATION: Landsmiths Pty Ltd v Hall [1999] NSWSC 735

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): 2869/99

HEARING DATE(S): 15/07/99

JUDGMENT DATE:
15 July 1999

PARTIES :

Landsmiths Pty Limited (P)
Enid Elizabeth Hall (D)

JUDGMENT OF: Young J

COUNSEL : I Sanderson (P)
P W Gray and A Pearman (D)

SOLICITORS: Philip L Higgins (P)
Searson Shannon & Co (D)

CATCHWORDS: Contracts [1]-Contract implied from conduct- Lease- Solicitor prepares draft lease as both parties intend- No contract until document signed and exchanged. Landlord & Tenant [11]- Creations of lease- Parties intending formal lease- In circumstances no lease until formal documents exchanged

ACTS CITED: Conveyancing Act 1919, s 54A

CASES CITED: Arjay Investments Pty Ltd v Morrison's Outdoor Catering Pty Ltd (Young J, 1 May 1995, unreported)
Blackburn Developments No 19 Pty Ltd v Downs Surgical (Australia) Pty Ltd (1974) 2 BPR 9141
Kalnenas v Kovacevich [1961] WAR 182
Kassabian v Lagonicos (1993) NSW ConvR 55-690
Stewart Upton Pty Ltd v Pindar (1990) NSW ConvR 55-529

DECISION: Proceedings dismissed with costs

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
YOUNG, J
THURSDAY 15 JULY 1999
2869/99 - LANDSMITHS PTY LTD V ENID ELIZABETH HALL
JUDGMENT
1    HIS HONOUR: This is a suit for specific performance of an alleged agreement for lease. Up until 30 June this year the plaintiff was a tenant of the defendant, and occupied shops 1 and 2, 73 Bold Street, Laurieton. The plaintiff had an option to renew, but it is common ground that it did not exercise that option.
2    The plaintiff made it clear to the defendant in the second quarter of 1999 that it wished to expand its business and would also wish to take a lease of shop 3 at that address, which is also owned by the defendant and which is currently occupied by a dentist who is holding over on a month to month basis.
3    Eventually the parties reached a consensus on a new lease at a rent of $1300 per month for five years with a five year option. There was then a conversation between them about 1 May in which Mr John Smith, who was negotiating on behalf of the plaintiff, told the defendant he only wanted a three by three lease now as his belief was the GST would not be coming into effect. The defendant said that she did not think she had much choice. There was then some discussion about air-conditioning and the parties left it on the basis that the defendant's solicitor, George Searson, would be submitting a formal lease.
4    Mr Searson did submit a lease on 25 May. The draft is not in evidence, but it would seem that the rent was $1400 per month and the draft had a GST related clause in it. Mr Smith wrote and phoned to the effect that he would like that clause removed and the rent stated as $1300 as agreed. Mr Searson's firm wrote back on 27 May enclosing an amended annexure A.

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.

Continue reading Landsmiths Pty Ltd v Hall

Details

AGLC: Landsmiths Pty Ltd v Hall [1999] NSWSC 735
Case: [1999] NSWSC 735
Decision Date: 15 July 1999

CaseChat Overview and Summary

The dispute before the court involved Landsmiths Pty Ltd and Hall. Landsmiths, the landlord, sought a declaration that a lease had been created between the parties, while Hall, the tenant, denied any such lease existed. The case was heard in the Federal Circuit Court of Australia. The central issue before the court was whether an enforceable lease existed between the parties despite the absence of a formal written agreement. Specifically, the court had to determine whether an implied contract for a lease could be found based on the conduct of the parties and the preparation of a draft lease by the landlord's solicitor.

The court considered whether the conduct of the parties, including the preparation of a draft lease by Landsmiths' solicitor, could imply a contract for a lease. The court noted that while the conduct of the parties suggested an intention to create a formal lease, a written agreement was necessary to formalise the lease. The court held that until the formal documents were signed and exchanged, no lease was created. The court emphasised the necessity of formal documentation in creating a binding lease, particularly when the parties intended a formal agreement. The court concluded that the preparation of a draft lease by the landlord's solicitor did not, in itself, create a binding lease. The conduct of the parties and the preparation of the draft lease were not sufficient to establish a contract for a lease without the exchange of signed documents.

The court granted Landsmiths' claim for a declaration that no lease had been created between the parties. The court emphasised that a formal written agreement is necessary to create a binding lease, even where the parties have intended to create one. The court's decision underscores the importance of formal documentation in lease agreements and the limitations of implied contracts in establishing a lease.

Orders