Marc and Adam Station Pier Pty Ltd v Schiavello Bros. Properties Pty Ltd
[2019] VSC 20
•1 February 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S ECI 2018 02809
S ECI 2018 02959
| MARC & ADAM STATION PIER PTY LTD (ACN 617 676 276) | Appellant |
| v | |
| SCHIAVELLO BROS. PROPERTIES PTY LTD (ACN 004 952 005) | First Respondent |
| - and - | |
| SCHIAVELLO GROUP PTY LTD (ACN 004 745 608) | Second Respondent |
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JUDGE: | Sifris J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 9 January 2019 |
DATE OF JUDGMENT: | 1 February 2019 |
CASE MAY BE CITED AS: | Marc & Adam Station Pier Pty Ltd v Schiavello Bros. Properties Pty Ltd & Anor |
MEDIUM NEUTRAL CITATION: | [2019] VSC 20 |
DECISION APPEALED FROM: | [2018] VCAT 1905 (Member A T Kincaid) |
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JUDICIAL REVIEW AND APPEALS – Application for leave to appeal from a decision of VCAT granting summary dismissal of claim that Second Respondent made misleading or deceptive representation as to the term of a head-lease to Applicant – Whether claim is frivolous, vexatious, misconceived or lacking in substance - No express representation or representation by silence made - No duty to correct any misapprehension on the part of the Applicant – No error of law established – Leave to appeal refused in respect of proposed grounds of appeal 1 to 4 – Leave to appeal granted in respect of grounds 5 and 6 – Appeal heard instanter and dismissed in respect of ground 5 and allowed in respect of ground 6.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant/Appellant | I Upjohn QC and A W Sandbach | Lennon Lawyers |
| For the Respondents | J Evans QC | Rigby Cooke Lawyers |
HIS HONOUR:
Introduction
This is an application for leave to appeal from orders made by the Victorian Civil and Administrative Tribunal (VCAT) on 30 November 2018 (Orders).[1] Leave to appeal is required.[2] The appeal is pursuant to s 148 of the Victorian Civil and Administrative Act 1998 (Vic) (VCAT Act) and relates to, it was submitted, errors of law. On 10 January 2019, I made orders refusing leave to appeal in respect of grounds 1 to 4 of the proposed Notice of Appeal, granting leave to appeal in respect of ground 5 but dismissing the appeal, and granting leave to appeal in respect of ground 6 and allowing the appeal.
[1]The Member’s reasons are cited as: Marc & Adam Station Pier Pty Ltd v Schiavello Bros Properties Pty Ltd (Building and Property) [2018] VCAT 1905 (the Reasons).
[2]Victorian Civil and Administrative Act 1998 (Vic) s 148(1)(b).
The Applicant, Marc & Adam Station Pier Pty Ltd (MASP) operates a restaurant from 1 Station Pier, Port Melbourne (the Premises). Mr Marc Manpreet Singh Chadha (Chadha) is the sole shareholder and director of MASP.
The Second Respondent, Schiavello Group Pty Ltd (Schiavello Group) is the lessee of the Premises, by a head lease dated 1 March 2001 (the head lease) with the Port Phillip City Council (the Council).[3]
[3]Riverbank Quest Pty Ltd (now in liquidation) (Riverbank) was previously the lessee under the head lease. It assigned the head lease to Schiavello Group in 2015. From about 20 June 2014, One Station Pier Pty Ltd (OSP) sub-leased the premises from Riverbank. At that time Chadha was the sole director of OSP.
On 31 July 2017, MASP (as sub-lessee) entered into a sub-lease with Schiavello Group as sub-lessor (the sub-lease). The sub-lease was for a period of one year and expired on 30 July 2018.
In April 2018, Schiavello Group purported to terminate the sub-lease pursuant to the terms of the sub-lease, relying on the alleged non-payment by the applicant of rent and outgoings for the month of April 2018. Following a demand by Schiavello Group for delivery up of the premises, MASP filed an application on 3 April 2018 for injunctive relief preventing Schiavello Group from re-entering the premises (the first proceeding).
On 16 May 2018 the parties entered into Terms of Settlement (the Terms) in compromise of the first proceeding.
The Terms provided, in essence, that:
(a) the parties having acknowledged that the sub-lease had been terminated by Schiavello Group on 1 April 2018, Schiavello Group granted a further right to MASP to occupy the premises for a 4-month period from 1 May 2018 to 31 August 2018 as licensee, for a licence fee of $15,000 plus GST per calendar month (the licence); and
(b) MASP was granted an option, which must have been exercised by it in writing by notice to Schiavello Group’s solicitors on or before 30 June 2018, to acquire its interest as lessee under the head lease, at a price of $7 million (plus any applicable GST) payable to Schiavello Group, with settlement to be completed on a date nominated by MASP but which was required to be on or before 31 August 2018 (being the expiry of the licence period) (the option).
Consent orders were consequently made in the first proceeding on 16 May 2018, providing that MASP must immediately vacate the premises. The order was stayed until 31 August 2018, so as to allow the licence and option to work.
MASP did not exercise the option on or before its expiry date of 30 June 2018. It has not suggested that any conduct of the Respondents caused it not to do so. MASP failed to vacate the premises on 31 August 2018.
I accept the contention made by Schiavello Group, that it was open to MASP, instead of exercising the option, to sell its restaurant business during the licence period to 31 August 2018.
On 30 August 2018, Schiavello Group gave MASP notice that it did not consent to any period of overholding.
On 31 August 2018, the licence expired.
The VCAT Hearing
In a proceeding filed on 3 September 2018 at VCAT, MASP sought to set aside the consent orders made on 16 May 2018 in the first proceeding, on the basis that it entered into the Terms, and subsequently consented to the orders on the basis of alleged misleading or deceptive conduct on the part of the respondents.
Schiavello Group filed a counterclaim seeking, among other things, possession of the premises.
At the request of the parties, on 5 October 2018, the Member set down the proceeding on a fast-track basis for hearing on 3 December 2018, with 2 days allocated. Given the proximate hearing date, Schiavello Group did not challenge the Member’s orders that, in effect, allowed MASP to remain in occupation of the premises as licensee, provided that it paid the agreed licence fee.
On 9 November 2018, Counsel for the Respondents expressed a desire to proceed with its dismissal applications, notwithstanding the hearing having been fixed for 3 December 2018.
On 30 November 2018, Member A T Kincaid made the Orders. Orders 1 to 4 are in the following terms –
1.On the respondents’ application under section 75(1) of the Victorian Civil and Administrative Tribunal Act 1998, the claim made by the applicant in the proceeding is dismissed.
2.The respondents’ application for dismissal or strike out of the claim under section 78(2) of the Victorian Civil and Administrative Tribunal Act 1998 is dismissed.
3.The applicant must vacate the premises at 1 Station Pier, Port Melbourne, being the land in Certificate of Title Volume 10389 Folio 933 by 4 pm on 14 December 2018.
4.The applicant must pay the second respondent damages for the continued occupation of the premises by the applicant since 1 September 2018, to be assessed.
The Member’s Reasons
The Reasons describe the claim by MASP as follows –
[23] The applicant alleges that prior to entering into the licence, the first and second respondents expressly represented, or alternatively represented by their silence, that the second respondent’s interest as lessee under the head lease “had more than 70 years to run”. The applicant alleges that the representation was false.
[24] Paragraphs 13-14 of the Amended Points of Claim state:
13. The basis for the Applicant agreeing to enter into [the] Consent Orders [dated 16 May 2018] was its understanding, based upon representations made to it by the Respondents, that the head lease had more than 70 years to run. This would allow the Applicant to seek to obtain refinance in order to allow it the opportunity to purchase [the second respondent’s interest in] the head lease for circa $7 million, being the reason why the 364-day Sublease was entered into in the first place.
13A. Alternatively, to paragraph 13 hereof, the Respondents negotiated with the Applicant a licence agreement relating to the premises (“the licence agreement”) in terms that the Applicant would exercise an option to purchase the head lease for circa $7 million, or sell its business during the term of the licence agreement.
13B. As the head lease had only 2 years to run, the Respondents must have been aware that the value of the head lease is far less than $7 millions [sic] and that the Applicant was negotiating under a severe misrepresentation as to the term of the head lease.
13C. The respondents failed to disclose to the Applicant at any time before the execution of the licence agreement, that the value of the head lease is far less than $7 million or that the head lease has only 2 years to run.
13D. In the circumstances set out in paragraphs 13A-13C hereof, the Respondents’ failure to disclose the matters set out in paragraph 13C constituted a misrepresentation by silence (“the misrepresentation by silence”).
14. It recently came to light that the head lease only has 2 years left to run. The issues related to this revelation have affected the Applicant’s ability to obtain refinance.
[25]The applicant says that on 2 August 2018, finance for the purpose of the applicant exercising the option and purchasing the second respondent’s interest was declined because, contrary to the alleged representations made by the respondents, the head lease did not have “more than 70 years to run”.
[26]The applicant seeks final relief in the nature of an order varying the licence pursuant to section 243(b) of the Australian Consumer Law (Victoria), such that it will not expire until 31 March 2019.
[27]The applicant’s rationale for seeking an extension to the licence period is that it will provide the applicant with an extended opportunity to sell its business, undistracted by what turned out to be the forlorn pursuit between 16 May 2018 and 2 August 2018 of seeking finance for the purpose of buying the second respondent’s interest as lessee. The applicant says that had it not continued to rely on the alleged representations during that period, it would instead have concentrated its efforts on “selling its business”.
The Member then summarised ‘the approach of the Tribunal to applications under section 75 of the [VCAT] Act.’[4] MASP does not complain about the summary of the relevant principles as such, but rather, the application of the facts and matters to the stated legal principles. The Member’s analysis is dealt with at [45] to [76] of the Reasons. Paragraph 76 of the Reasons is in the following terms –
[76]I find for the reasons I have discussed, that the claims in the proceeding, together with the relief sought, are frivolous, vexatious, misconceived and lacking in substance, and that they must be dismissed under section 75 of the Act.
[4]The Reasons at [37] to [39].
The approach and finding of the Member, as set out in the Reasons, are as follows:
(a) The alleged representation that the sub-lease had ’70 years to run’ was not a false representation. (Reasons at [45] to [55]).
(b) The alleged express misrepresentation by the Respondents that the sub-lease ‘had 70 years to run’ was bound to fail. (Reasons at [56] to [57]).
(c) The claim that the Respondents must have been aware of the alleged discretion in the Council was bound to fail. (Reasons at [58] to [59]).
(d) If there was a residual discretion in the Council to decline a renewal, the allegation that the Applicant was entitled to have a reasonable expectation that that would be disclosed was bound to fail. (Reasons at [60] to [63]).
(e) On no reasonable view is the Applicant entitled to the relief claimed. (Reasons at [64] to [76]).
The Reasons are comprehensive and clear and no error of law has been demonstrated.
The alleged representation was not false
The Member found that this allegation was hopeless and bound to fail essentially because MASP was aware, at the very least since 16 March 2018 (well before the Terms were entered into) of the terms of the head lease and in particular, its duration. The head lease was provided to MASP on 16 March 2018.
Although the Member held that MASP ‘was at all relevant times fixed with knowledge that the head lease has “more than 70 years to run”’,[5] it is tolerably clear from the Reasons that such knowledge included the breakdown of the period into an initial term of 20 years and the further terms of 20 years each and a final term of 19 years.[6]
[5]The Reasons at [48].
[6]That is, the head lease assigned to Schiavello Group, an initial term of 20 years, and options in respect of three further terms of 20 years each, and a fourth final term of 19 years.
Despite this knowledge, MASP contended that the head lease was not a 70 year fixed lease, as it says it understood (based on representations made) the head lease to be. Rather, the head lease had 2 years to go, together with a series of options. It was contended that the options, that is the need for further steps to be taken, created uncertainty as to the duration of the lease and constituted the relevant alleged falsity.
The Member dealt with this aspect as follows –
[49]Contrary to this proposition, however, he applicant alleges the existence of particular facts and matters it claims to have discovered subsequent to its entry into the Terms, that support its conclusion that the sub-lease does not have 70 years to run, and which allegedly should have been disclosed by the respondents, as follows:
On or about 30 July 2018 [Mr Chadha] spoke with Mr Matthew Longhorne, the [council’s] senior property adviser who advised [Mr Chadha] that the first term of the Head Lease will expire after 20 years and, having commenced on 21 March 2001, there were only about 2 years remaining, with the options to continue as follows: 4 x 20 years + 19 years; 18 years already have run. Mr Longhorne explained to [Mr Chadha] that the grant of the options are dependent upon the Council’s decision, meaning that [the applicant would] not [be] guaranteed further options and an 81-year (sub)lease
[50]It is therefore alleged by the applicant that this information puts a lie to the proposition that the lease “had more than 70 years to run”, and imposes a limitation on the tenure of the second applicant in the premises; that is to say, the alleged overriding claimed discretion of the Council means that the lease allegedly has “only 2 years to run” until the end of the first term. The applicant alleges, therefore, that notwithstanding the availability of the options, it cannot be said that the head lease has “70 years to run”. It alleges that the respondents “must have been aware” of the facts and matters that give rise to the conclusion that the head lease did not have 70 years to run, leading to an obligation to disclose it to the applicant.
[51] I have not been referred to any provision in the head lease that grants to the Council a residual discretion in respect of granting an extension of the head lease, upon the due exercise of an option pursuant to the terms of the head lease.
[52]Further, I have not been referred to any provision by which the council is able to terminate the lessee’s interest under the head lease by the council giving 28 days’ notice.
[53]Whatever position the Council has adopted in regard to its rights, the proposition that the head lease “has more than 70 years to run” is arguably therefore, a correct description of the position at law provided, of course, all the options under the head lease are properly exercised in accordance with terms of the head lease.
[54]I am not satisfied that there is any satisfactory evidence advanced by the applicant that the contractual entitlement of the lessee under the head lease to exercise options in respect of the further terms under the lease is subject to any overriding unfettered discretion in the Council.
[55]I have therefore concluded that the claim that there was a false representation to the effect that the head lease “had 70 years to run”, upon which the applicant allegedly relied, is hopeless and bound to fail, as a matter of fact and law, within the meaning of the authorities to which I have referred.
Express representation by the Respondents that the head lease ‘had 70 years to run’
The Member dealt with this aspect as follows –
[56]The unparticularised allegation in paragraph 13 of the Amended Points of Claim that there was an express representation by the respondents that the second respondent’s interest as lessee “had more than 70 years to run”, whatever the applicant may have understood that expression, must fail.
[57]This is because Counsel for the applicant conceded during submissions on 9 November 2018 that Mr Chadha of the applicant had not been led to believe not by the respondents that the sub-lease “had more than 70 years to run” but by Riverbank, the previous sub-lessor to his company OSP. This was well prior to the second respondent becoming sub-lessor.
The Respondent’s knowledge of the discretion in the Council
The Member dealt with this aspect as follows –
[58]Even if there is a residual discretion in the council as to whether to allow a renewal of the head lease, the applicant provides no particulars as to why as a matter of fact or inference, the respondents “must have been aware” of it and also aware, therefore, that the value of the head lease is “far less than $7 million”.
[59]In my view, such claimed imputed knowledge on the part of the respondents is, on the pleadings and affidavit material, bound to fail.
If there is a residual discretion in the Council, should the Respondents have disclosed it?
The Member dealt with this aspect as follows –
[60]If, as matter of fact or law, there is a discretion in the council as to whether to grant a new term upon the exercise of an option, and the respondents were aware of this (the proof by the applicant of which propositions I have already found is hopeless), is there a reasonable argument that the particular circumstances surrounding the parties’ entry into the Terms and the licence, should have given rise to a reasonable expectation on the part of the applicant that the respondents’ knowledge of the discretion would be disclosed.
[61]The most that can be argued at the hearing by the applicant in this respect is that the respondents failed to disclose to the applicant that the Council took the view that it held a residual discretion not to grant a further term of the sub-lease, and notwithstanding that:
(a) the sub-lease on its face, had 70 years to run, provided the options were duly exercised.
(b) the terms of the head lease grant no such overriding discretion to the Council;
(c) the respondents had no knowledge of the applicant’s understanding, given to it by Riverbank, that the head lease had “more than 70 years to run” (whatever the applicants may have understood by that expression);
(d) the applicant was legally represented at all relevant times in a commercial bargaining process.
[62]Additionally, the Tribunal must take into account all other circumstances during which the bargain was struck; namely that the applicant, and/or its controlling mind Mr Chadha:
(a) had been in possession of the head lease since 22 June 2014 or at the very latest, 16 March 2018;
(b) had been represented by the same lawyers at all relevant times before, during and after OSP’s signing of the sub-lease from Riverbank, the subsequent sub-lease from the second respondent and the licence from the second respondent;[38] and
(c) was in a position itself to approach the Council about the view it takes in relation to its rights under the head lease, as was indeed demonstrated by subsequent events.
[63]I have concluded that, if the respondents were aware that the Council held a view concerning its claimed residual discretion to grant a new term of the head lease, having regard to the above authorities, the allegation that the applicant was entitled to have a reasonable expectation that that would be disclosed is obviously unsustainable, and is bound to fail within the meaning of the authorities to which I have referred.
On no reasonable view is the Applicant entitled to relief
The Member dealt with this aspect as follows –
[65]The applicant asserts that it only became aware on 30 July 2018, alternatively, 2 August 2018, that the sub-lease allegedly had only 2 years to run, and that it had therefore negotiated the licence under a “severe misrepresentation”
…
[70]On the applicant’s own case, therefore, it did not seek to exercise the option before 30 June 2018, even though it did not then know that as a result of the Council’s declared position, the head lease only had 2 years remaining. The Amended Points of Claim do not allege that applicant was acting under any misapprehension caused by the second respondent as to the date that the option was to be exercised, and which may have affected the applicant’s decision, to its detriment, not to exercise the option. I find that it is clear that from 1 July 2018, the applicant must be taken to have known that the option period had expired, but it appears to have taken no steps to sell its business. Instead, by continuing through to the end of July 2018 to seek finance in order that it could buy the second respondent’s interest, it was apparently seeking to rely on a potential willingness on the part of the second respondent to agree to an extension of the period within which the option might be exercised. The applicant did not have any legal right to require this of the second respondent. Also, relief from forfeiture of an option will generally not be available.
[71]The applicant can claim no legal interest in the premises under the option, which was extinguished from 30 June 2018, and no interest under the licence, which came to an end on 31 August 2018.
[72]At its highest, therefore, if it were found that the applicant entered into the terms and the licence agreement in reliance on the misleading and deceptive conduct of the respondents, and that this was discovered by the applicant prior to 30 June 2018, the latest date for the exercise of the option, the applicant may then have been entitled to a remedy. It would then have been arguably entitled to an extension of the licence of 1 month beyond 31 August 2018, to allow it a total period of 3 months to sell its business. Having not exercised the option, however, the applicant knew on 1 July 2018 that, barring the agreement of the second respondent to grant a further option, the applicant had to sell its business, and not continue making what it came to realise was a hopeless search for finance.
[73] In summary:
(a) the applicant had originally agreed to a term under the licence of 3 months to enable it to sell the business, if it did not otherwise exercise the option by 30 June 2018;
(b) the option has expired;
(c) notwithstanding the expiry of the option, and without any extension of the option having been granted by the second respondent, the applicant continued to pursue financing as would have allowed it to seek to exercise it;
(d) the applicant has had a further 4 month period from 2 August 2018, the latest date upon which it says it realised that it would not be funded in respect of any attempt by it to exercise the option; and
(e) in addition to this period of time, the applicant seeks a further period to sell its business, from the date of a determination in the proceeding to 31 March 2019.
[74]I accept the second respondent’s submission there can be no basis upon which the Tribunal could reasonably require the licence to be amended pursuant such as to allow the applicant to remain in occupation of the premises for a period of 8 months beyond the date when, on its own evidence, it was no longer labouring under the effects of the alleged misleading and deceptive conduct. This is particularly so when one considers that under the terms of the licence, the applicant considered it needed only 3 months to sell its business.
[75]Seen in this light, there is no reasonable basis in my view that can justify the relief that is being sought by the applicant.
[76]I find for the reasons I have discussed, that the claims in the proceeding, together with the relief sought, are frivolous, vexatious, misconceived and lacking in substance, and that they must be dismissed under section 75 of the Act.
The Proposed Grounds of Appeal
The proposed grounds of appeal are as follows –
1. That Member Kincaid erred by failing to find or hold that the representation by silence alleged to have been made by the Respondents in failing to correct the Appellant’s misapprehension that the sublease was worth anything approaching $7,000,000.00 as the Appellant believed that the sublease had “70 years to run” was arguably a false representation and constituted misleading and deceptive conduct upon which the Appellant relied in entering into the Terms of Settlement and Licence Agreement.
2. That the learned Member erred in concluding that the Appellant’s claim that there was a false representation to the effect that the head lease “had 70 years to run”, upon which the Appellant relied, was hopeless and bound to fail, as a matter of fact and law, by reason that there is a material difference between a fixed 70-year lease (which is what was alleged to have been represented to the Appellant and a lease with a series of options.
3. That the learned Member erred in failing to find or hold that although the Second Respondent as head tenant of the lease was contractually bound as between it and the Appellant as sub-tenant to take steps to effectively exercise its options there is a risk that it may not do so and that the Appellant would be unable to rectify any default on the part of the Second Respondent.
3A. That the learned Member erred in misconceiving the Applicant’s case as being based on the existence of a residual discretion in the Council to refuse to allow a renewal of the head lease.
3B. That the learned Member further erred in holding that the claim of the Appellant ought to be imparted was bound to fail, both on the pleadings and the affidavit material.
3C. That the learned Member erred in holding that the Appellant’s submission that is had a reasonable expectation of disclosure was obviously unsustainable and is bound to fail.
3D. That the learned Member erred in holding that there was no reasonable justification for the relief claimed, namely an extension of time for a reasonable period after the determination of the claim to enable the Appellant to sell its business with the benefit of an Order fixing a reasonable time for sale.
4. That the Appellant’s claims in the proceeding and relief sought were not frivolous, vexatious, misconceived and lacking in substance and ought not have been dismissed under section 75 of the Victorian Civil and Administrative Tribunal Act
5. That the learned Member erred in granting relief to the second respondent, as he did in paragraphs 3 and 4 of the Order, which could only properly be granted on the final hearing of the Counterclaim.
6. That the learned Member erred in granting relief sought by the second respondent on its Counterclaim to it on the hearing of its application for dismissal of the applicant’s claim pursuant to s 75 of the VCAT Act.
Consideration
In my opinion, grounds 1 to 4 are indeed hopeless in every respect. The claims are misconceived and totally lacking in substance. They are embarrassing and should not be permitted to proceed. In fact they are so bad and lacking of merit that the correct course was to dismiss the claims in a summary way. As noted, the Reasons are clear and comprehensive and no error has been demonstrated. In fact, I agree entirely with the Reasons. It is neither necessary nor desirable to deal with every point.
In essence, the claim made by MASP is that, although it had a copy of the head lease before entering into the Terms, the Respondents did not tell MASP that the head lease was not in fact a fixed term of 70 years but rather a series of options, which although totalled 70 years, lacked this certainty of duration because it required the exercise of the options, from time to time by the intermediate tenant (the Respondents) and not the sub-tenant (MASP). Implicit in this submission is that although there may well be a 70 year tenure, this is dependent on steps being taken and was not automatic. The claim is self-evidently ludicrous and fails at every level.
Grounds 1 to 4 are conveniently and easily disposed of when regard is had to the various findings of fact, clearly open on the evidence, and for the most part not challenged or indeed admitted and the matters, facts and circumstances of the case. I refer in particular to the following facts, matters and circumstances –
(a) There was no express representation by the Respondents as to the 70 year tenure. This is admitted. Prior representations by others to others are largely irrelevant.[7] Further, the representation itself ‘had more than 70 years to run’ is not entirely clear. In so far as it is was suggested that this conveyed the statement that ‘there was a fixed term 70 year lease’ or that this was the understanding of MASP, such a suggestion is not tenable in the circumstances.
[7]The Appellant submitted that the assignment of the head lease from the Respondents’ predecessor in title, Riverbank Quest Pty Ltd (Riverbank), was ‘subject to equities’ including the equity arising from Riverbank’s misrepresentation as to the duration of the head lease. Further, it was submitted, that it is not necessary that the plaintiff is the person to whom the misrepresentation was made, so long as the plaintiff suffers loss caused by the misrepresentation. The Member adequately dealt with the submission of the Applicant, that the Respondents ought to be imputed with this knowledge.
(b) There was no representation by silence by the Respondents. They were under no duty whatsoever to correct any misapprehension by MASP. Why would they? There is no suggestion they were even aware of any such misapprehension. MASP had the head lease, lawyers acting for them, and entered into the Terms with such knowledge of the duration and the options, and what was required to exercise the options. They had as much knowledge as the Respondents. The Council’s attitude and attributed statements are, in context, irrelevant.
(c) The shift of emphasis in the Applicant’s submissions from the Council’s attitude and position to the requirement that the options be exercised by Schiavello Group and not MASP, being part of the falsity claim is inaccurate and untenable for many obvious reasons.
(d) The suggested representation was not in any event false.
(e) There was in any event, and in the circumstances and given the knowledge referred to and the failure to seek any extension of the option, no reliance by MASP.
(f) Finally, there is no loss and no ability to seek the relief claimed.
Ground 1 – No such representation (by silence) was made. There were no circumstances that required Schiavello Group to say anything as contended. In particular, there was no need to say that there were options that needed to be exercised and indeed, only if exercised, would lead to the 70 year term. MASP were aware of all of this.
Ground 2 – The representation was not false as there was in substance, a 70 year lease, the integers of which MASP were fully aware of, including the requirement to exercise the various options in order to achieve such tenure.
Ground 3 – By the exercise (and implementation) of the option, MASP would have this right and it is not for the Respondents to be compelled to do so.
Ground 3A – There was no such error. This was part of the evidence of MASP directed to falsity.
Ground 3B – There was no error. There was no such knowledge that required disclosure.
Ground 3C – There was no error. No disclosure was necessary or required.
Ground 3D – There was no error. No extension of time was justified in the circumstances.
Ground 4 – There was no error. The claim was hopeless, lacking in substance and fundamentally misconceived.
Insofar as grounds 5 and 6 relate to Order 4 of the Orders (damages), leave to appeal should be granted and the appeal allowed. This was correctly conceded by the Respondents.
Insofar as grounds 5 and 6 relate to Order 3 of the Orders (possession), leave to appeal should be granted and the appeal dismissed, substantially for the reasons submitted by the Respondents. The order follows from the earlier order made on 16 May 2018, which was stayed until 31 August 2018. Such an order is logical, inevitable and a proper consequence of the dismissal of the claim made by MASP. In any event I propose to make an order in favour of the Respondents pursuant to their proceeding in this Court, pursuant to O 53 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).[8]
[8]Proceeding S ECI 2018 02959.
For these reasons, orders were made (in both proceedings) on 10 January 2019.
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