Leads Plus Pty Ltd v Kowho Intercontinental Pty Ltd - [2000] NSWSC 459

Reported Decision: (2000) 10 BPR 18,085
[2001] ANZ ConvR 573

New South Wales

Supreme Court

CITATION: Leads Plus Pty Ltd v Kowho Intercontinental Pty Ltd [2000] NSWSC 459

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 2420/2000

HEARING DATE(S): 18/05/2000

JUDGMENT DATE: 18 May 2000

PARTIES :

Leads Plus Pty Limited (P)
Kowho Intercontinental Pty Limited (D)

JUDGMENT OF: Young J

COUNSEL : M Cashion SC (P)
J B Whittle SC and D Burwood (D)

SOLICITORS: Henry Davis York (P)
Truman Hoyle (D)

CATCHWORDS: EQUITY [87]- Relief against forfeiture- Option- Not exercised in due time- Power to grant relief against forfeiture, but only in exceptional cases- No arguable case that present matter exceptional. - LANDLORD & TENANT [41] Relief against forfeiture- Option to renew- Not exercised in due time- Extent to which relief available.

CASES CITED: Bragg v Alam [1981] 1 NSWLR 668
Harries v Bryant (1827) 4 Russ 89; 38 ER 738
Hillier v Goodfellow (1988) V Conv R 54-310
Legione v Hateley (1983) 152 CLR 406

DECISION: Interlocutory injunction refused.

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG J

THURSDAY 18 MAY 2000
2420/00 - LEADS PLUS PTY LIMITED V KOWHO INTERCONTINENTAL PTY LIMITED
JUDGMENT
1    HIS HONOUR: This is an application for an interim injunction by a tenant against the landlord in respect of the tenant's failure properly to exercise an option for a renewed lease over premises in Harris Street, Ultimo.
2    The parties entered into a lease of the subject premises for three years terminating on 13 May 2000. Clause 17.1 of the lease was as follows:

"If the Lessee desires to take a renewed Lease of the Demised Premises for the further Term...from the expiration of the Term and:

(a) gives to the Lessor previous notice of such desire not less than three months nor more than six months prior to the expiration of the Term; and

(b) is not then or at any time thereafter prior to commencement of such renewed Lease in default under the provisions of this Lease whether express or implied; and
(c) provided the Lessee has duly and punctually paid the rent and other moneys, if any, hereunder,

the Lessor will at the cost and expense of the Lessee grant to the Lessee a renewal of this Lease for the said further Term..."

3    Under that clause, the last day for exercising the option was probably 13 February 2000, though argument could be put that it was 12 February 2000. It does not matter because the evidence clearly is that the earliest day on which the tenant purported to exercise the option was 14 February 2000.
4    The evidence for the plaintiff tenant is that a fax giving notice of its desire to exercise the option was sent to the lessor's managing agents on the late morning of 14 February 2000 and that there was a conversation between the principal of the lessee, Mr Graham, and the managing agents confirming that the fax had been received. The…

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: [2000] NSWSC 459
Decision Date: 18 May 2000

CaseChat Overview and Summary

In the case of Leads Plus Pty Ltd v Kowho Intercontinental Pty Ltd, the primary dispute involved the enforcement of a forfeiture clause in a commercial lease. The respondent, Leads Plus, sought to terminate the lease and forfeit the property, arguing that the appellant, Kowho Intercontinental, had failed to exercise an option to renew within the specified time. The case was heard by the Supreme Court of New South Wales. The central legal issue was whether the court could grant relief against forfeiture when the option to renew was not exercised in due time. This issue turned on the interpretation of the lease terms and the equitable principles surrounding relief against forfeiture.

The court considered whether there were exceptional circumstances that would justify relief against forfeiture. It was noted that relief against forfeiture is typically granted sparingly and only in exceptional cases. The court examined whether the present matter met the criteria for such relief. The evidence suggested that while the option was not exercised within the strict timeframe, there were mitigating factors such as the nature of the relationship between the parties and the absence of prejudice to the respondent. However, the court found that there was no arguable case that the present circumstances were exceptional enough to warrant relief against forfeiture.

After thorough consideration, the court held that the lease's terms were clear and that the failure to exercise the option to renew within the stipulated time was a decisive factor. The court determined that the equitable principles did not extend to granting relief in this instance, as the case did not meet the stringent requirements for such an exception. Consequently, the respondent was entitled to enforce the forfeiture clause, and the appellant's application for relief against forfeiture was dismissed. The court's decision reinforced the importance of strict compliance with lease terms, particularly regarding options to renew.

Orders