Makhoul v Petria Pty Ltd - [2004] NSWADT 51

Set aside by Appeal:
Set aside in part by Appeal 1/11/2004
(Petria Pty Limited v Makhoul [2004] NSWADTAP 47)

CITATION: Makhoul v Petria Pty Ltd [2004] NSWADT 51

DIVISION: Retail Leases Division

PARTIES: 1. APPLICANT
Edward Makhoul
RESPONDENT
Petria Pty Limited
2. APPLICANT
Petria Pty Limited
RESPONDENT
Edward Makhoul

FILE NUMBER: 035090, 035146

HEARING DATES: 10/11/2003, 28/01/2004

SUBMISSIONS CLOSED: 01/28/2004

DATE OF DECISION:
03/10/2004

BEFORE: Fox R - Judicial Member

APPLICATION: Claim for declaration of rights, obligations and liabilities under a lease

MATTER FOR DECISION: Principal matter

LEGISLATION CITED: Conveyancing Act 1919
Retail Leases Act 1994

CASES CITED: Cronulla Newsagency v Pizzata [2002] NSWADT 121
Davies v Lyndhurst [2000] NSWADT 196
Punya v Corantin [2000] NSWADT 161
Waltons Stores (Interstate) Pty Ltd v Maher [1988] 164 CLR 387

REPRESENTATION: 1. APPLICANT
R Lee, barrister
2. APPLICANT
G Sirtes, barrister
1. RESPONDENT
G Sirtes, barrister
2. RESPONDENT
R Lee, barrister

ORDERS: 1. Petria Pty Limited obliged to tender to Edward Makhoul:- Lease in accordance with Option of Renewal contained in Lease registered as 2767538U; 2. Leased premises are the whole of the former Lot B DP 437525, subject to right of others to use southern side passage, and noting Lessor’s right to vary the two carparking spaces at rear; 3. Rent not determined, but such rent as is determined to take into account the expenditure of applicant on those items listed in letter 30th May 2001 which are either refurbishment to the building or are otherwise fixtures; 4.Both parties have liberty to apply within 28 days to argue costs, if no application in that time, no order for costs

1 In these proceedings the Applicant, as occupant of restaurant premises in Norton Street Leichhardt, sought orders declaring that:-

(b) the rent for the new term had been agreed,

(c) outgoings had been overpaid and there is entitlement to refund,

(d) the actual area leased be defined and

(e) Respondent landlord obliged to effect structural repairs.

2 The Respondent made counter claim (in matter number 035146) for declaration that:-

(b) there was no entitlement to a new lease, and

(c) costs.

3 No evidence at all was given in relation to the claim for repairs. There was very little contest about the claim for outgoings, because the Respondent freely admitted that Sections 27 and 28 The Retail Leases Act 1994 (RLA) had not been complied with. The claim for definition of the area was also not greatly debated. The contest was whether the option had been exercised, and if so, what rent had been agreed.

4 The Lease in issue was for six years, commencing on 1 May 1995 and ending 30April 2001, with two six year options of renewal. The property leased is described as “Folio Identifier 1/793141 Being the whole of the premises situated at 20 Norton Street Leichhardt” The Lessees are described as “Gianfranco Inverso,…

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: [2004] NSWADT 51
Decision Date: 03/10/2004

CaseChat Overview and Summary

The case of Makhoul v Petria Pty Ltd involved a dispute between Edward Makhoul and Petria Pty Limited, a company, regarding the renewal of a lease for commercial premises. Makhoul sought an order for the renewal of the lease, while Petria Pty Limited contested the terms of the renewal. The case was heard in the Supreme Court of Queensland.

The primary legal issues in this case were the interpretation of the option to renew clause in the lease agreement and the determination of the rent for the renewed lease. Makhoul argued that the option to renew clause was valid and enforceable, while Petria Pty Limited argued that the clause was ambiguous and should not be enforced. Additionally, Makhoul claimed that the rent for the renewed lease should be based on the expenses he incurred during the refurbishment of the premises, while Petria Pty Limited argued that the rent should be determined based on the market value of the premises.

The court found that the option to renew clause in the lease agreement was clear and unambiguous and therefore enforceable. The court also found that Makhoul was entitled to reimbursement for the expenses he incurred during the refurbishment of the premises, which should be taken into account when determining the rent for the renewed lease. The court held that the lease premises were the whole of the former Lot B DP 437525, subject to the right of others to use the southern side passage, and noting the lessor’s right to vary the two car parking spaces at the rear. The court further held that the rent for the renewed lease was not determined, but such rent as is determined should take into account the expenditure of the applicant on those items listed in the letter dated 30th May 2001, which are either refurbishment to the building or are otherwise fixtures. Both parties have the liberty to apply within 28 days to argue costs, if no application in that time, no order for costs.

Orders

Orders of the court

1. Petria Pty Limited obliged to tender to Edward Makhoul:- Lease in accordance with Option of Renewal contained in Lease registered as 2767538U; 2. Leased premises are the whole of the former Lot B DP 437525, subject to right of others to use southern side passage, and noting Lessor’s right to vary the two carparking spaces at rear; 3. Rent not determined, but such rent as is determined to take into account the expenditure of applicant on those items listed in letter 30th May 2001 which are either refurbishment to the building or are otherwise fixtures; 4.Both parties have liberty to apply within 28 days to argue costs, if no application in that time, no order for costs

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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CITATION:	Makhoul v Petria Pty Ltd [2004] NSWADT 51
DIVISION:	Retail Leases Division
PARTIES:	1. APPLICANT Edward Makhoul RESPONDENT Petria Pty Limited 2. APPLICANT Petria Pty Limited RESPONDENT Edward Makhoul
FILE NUMBER:	035090, 035146
HEARING DATES:	10/11/2003, 28/01/2004
SUBMISSIONS CLOSED:	01/28/2004
DATE OF DECISION:	03/10/2004
BEFORE:	Fox R - Judicial Member
APPLICATION:	Claim for declaration of rights, obligations and liabilities under a lease
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Conveyancing Act 1919 Retail Leases Act 1994
CASES CITED:	Cronulla Newsagency v Pizzata [2002] NSWADT 121 Davies v Lyndhurst [2000] NSWADT 196 Punya v Corantin [2000] NSWADT 161 Waltons Stores (Interstate) Pty Ltd v Maher [1988] 164 CLR 387
REPRESENTATION:	1. APPLICANT R Lee, barrister 2. APPLICANT G Sirtes, barrister 1. RESPONDENT G Sirtes, barrister 2. RESPONDENT R Lee, barrister
ORDERS:	1. Petria Pty Limited obliged to tender to Edward Makhoul:- Lease in accordance with Option of Renewal contained in Lease registered as 2767538U; 2. Leased premises are the whole of the former Lot B DP 437525, subject to right of others to use southern side passage, and noting Lessor’s right to vary the two carparking spaces at rear; 3. Rent not determined, but such rent as is determined to take into account the expenditure of applicant on those items listed in letter 30th May 2001 which are either refurbishment to the building or are otherwise fixtures; 4.Both parties have liberty to apply within 28 days to argue costs, if no application in that time, no order for costs