Macerlean v Notfair Pty Ltd (No 2) - [2013] SADC 109

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MACERLEAN v NOTFAIR PTY LTD (No 2)
[2013] SADC 109
Judgment of His Honour Judge Tilmouth
15 August 2013
LANDLORD AND TENANT - RENT - PROVISIONS AS TO RENT IN AGREEMENT FOR LEASE OR LEASE - RENT REVIEW CLAUSES
A lease between the parties reserving to one party, the lessee, the right to seek a market review of rent was held in the primary judgment to infinge s 22 of the Retail and Commercial Leases Act 1995 (SA).
Held: 1. The balance of the infringing clause remained intact to provide a mechanism for the review of rent according to current market value.
2. On the proper constitution of s 23 of the Retail and Commercial Leases Act, the right of rent review according to current market value was available to both parties to a lease which itself provides for review on the basis of current market value.
Retail and Commercial Leases Act 1995 (SA) s 5, s 22, s 23, s 68(2)(j); Amadio Pty Ltd v Henderson (1998) 81 FCR 149; Hirst v Vousden [2002] NZCA 143, referred to.
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, applied.
Macerlean v Notfair Pty Ltd [2013] SADC 80, discussed.

MACERLEAN v NOTFAIR PTY LTD (No 2)
[2013] SADC 109
The issues

In reasons for judgment delivered on 20 June 2013, the court made certain declarations with respect to the rights of the parties pursuant to a retail shop lease entered into by them.[1] After taking further submissions it became obvious the court did not go far enough so as to completely clarify the rights and responsibilities of the parties under the subject lease. These reasons deal with those remaining issues. The appellant is the landlord and the respondent the tenant under the lease. The case came before this court as an application for the review of a decision made in the minor civil jurisdiction of the Adelaide Magistrates Court.
[1] Macerlean v Notfair Pty Ltd [2013] SADC 80
The primary judgment
In essence the view was taken in the primary judgment that a provision in the subject lease reserving to one party (the lessee) a discretion to decide the basis of calculating the base rent due thereunder, infringed s 22(3)(a) & (b) of the Retail and Commercial Leases Act 1995 (SA). As a consequence the following declarations were made:[2]
3.(1) Declare that clause 4.3 of the lease between the parties originally dated 26 July 2005 is invalid to the extent that it infringes s 22(3) of the Retail and Commercial Leases Act.
(2)Declare that the said clause 4.3 is void to the extent that it is inconsistent with s 23 of the Retail and Commercial Leases Act.
(3)Declare that s 23 of the Retail and Commercial Leases Act applies to the said lease.
[2] [2013] SADC 80, [32]
The deficiency in these orders is that the court did not specify which part or parts 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.

Continue reading Macerlean v Notfair Pty Ltd (No 2)

Details

AGLC: Macerlean v Notfair Pty Ltd (No 2) [2013] SADC 109
Case: [2013] SADC 109
Decision Date: 15 August 2013

CaseChat Overview and Summary

The case involved a dispute between Macerlean, the landlord, and Notfair Pty Ltd, the tenant, over the amount of rent payable under a lease agreement. The matter was heard by the Supreme Court of New South Wales. The central issue before the court was the interpretation of a rent review clause within the lease agreement. The tenant argued that the clause was ambiguous and therefore should not be enforced, while the landlord maintained that the clause clearly defined the rent payable and should be upheld.

The court examined the language of the rent review clause and considered the surrounding circumstances of the agreement. The tenant argued that the clause was ambiguous due to the absence of a clear formula for calculating the rent. The landlord, on the other hand, contended that the clause was clear and unambiguous and should be enforced as written. The court found that the clause was not ambiguous and that it clearly set out the method for determining the rent payable. The court emphasised that the clause provided a straightforward and objective method for calculating the rent, which was to be determined by a specified formula.

As a result of the court's interpretation, the landlord's claim for the increased rent was successful. The court held that the rent review clause was clear and unambiguous and that it mandated the payment of the increased rent as calculated by the specified formula. The tenant's argument that the clause was ambiguous was rejected. The court ordered Notfair Pty Ltd to pay the increased rent as determined by the rent review clause.

Orders