Mirvac Funds Management Ltd v Value Lodging Pty Ltd - [2022] NSWSC 787

Supreme Court

New South Wales

Medium Neutral Citation: Mirvac Funds Management Ltd v Value Lodging Pty Ltd [2022] NSWSC 787
Hearing dates: 9 June 2022
Date of orders: 16 June 2022
Decision date: 16 June 2022
Jurisdiction: Equity
Before: Darke J
Decision:
Notices of termination held to be valid and effective. Plaintiffs held to be entitled to vacant possession by the end of 1 July 2022, subject to payment of Termination Fees in accordance with leases or sub-leases.

Catchwords:
LAND LAW – leases and subleases – interpretation of leases and subleases – where one condition of termination of leases and subleases by lessor is service of notice of termination requiring vacant possession 3 Months from the date of service – where lessor served notices of termination on 30 March 2022 requiring vacant possession no later than 30 June 2022 – where lessee alleges that notices should not have required vacant possession before 1 July 2022 and that notices are accordingly invalid – “Month” defined in leases and subleases as a named month – 3 Months from date of service held to include April, May and June 2022 – notices held to have erroneously called for vacant possession by 30 June 2022 – notices nonetheless held to be valid and effective as notices would make it clear to a reasonable recipient that lessor was seeking vacant possession only in accordance with identified provisions of leases and subleases
WORDS AND PHRASES – “Month” – “Named Month” – “Calendar Month”

Legislation Cited:
Conveyancing Act 1919 (NSW), s 181(1)(d)
Interpretation Act 1987 (NSW), s 21

Cases Cited:
Alexakis v Wan (2021) 20 BPR 41,243; [2021] NSWSC 367
Aura Enterprises Pty Ltd v Frontline Retail Pty Ltd (2006) 202 FLR 435; [2006] NSWSC 902
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Dodds v Walker [1981] 1 WLR 1027
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
Etlis v New Age Constructions (NSW) Pty Ltd [2005] NSWCA 165
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749
Masters in Building Training Pty Ltd v State of New South Wales [2022] NSWSC 499
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37
Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; [2016] HCA 52

Category: Principal judgment
Parties: Mirvac Funds Management Ltd as trustee of the Tucker Box Hotel Trust (First Plaintiff)
The Trust Company Ltd (Second Plaintiff)
Value Lodging Pty Ltd (First Defendant)
Toga Hotel Management Holdings Pty Ltd (Second Defendant)
Representation:
Counsel:
Mr I M Jackman SC with Ms L Rich (Plaintiffs)
Mr R A Dick SC with Ms B A Ng (Defendants)
Solicitors:
Allens (Plaintiffs)
Speed and Stracey Lawyers (Defendants)

File Number(s): 2022/144211
Publication restriction: None

Judgment

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: [2022] NSWSC 787
Decision Date: 16 June 2022

CaseChat Overview and Summary

In the case of Mirvac Funds Management Ltd v Value Lodging Pty Ltd, the dispute revolved around the interpretation of leases and subleases, specifically the conditions for their termination. Mirvac, the lessor, had served notices of termination to Value Lodging, the lessee, on 30 March 2022, requiring vacant possession by 30 June 2022. Value Lodging argued that the notices were invalid as they should have required vacant possession no earlier than 1 July 2022. The case was heard in the Supreme Court of Victoria.

The central legal issue was the interpretation of the term "Month" as defined in the leases and subleases. The leases and subleases defined "Month" as a "Named Month," which was argued by Value Lodging to mean a "Calendar Month." The court had to determine whether the term "Month" meant a "Calendar Month" or a specific named period, and how this affected the calculation of the termination date. The court considered the language of the leases, the context in which the term "Month" was used, and the commercial purpose of the leases.

The court held that the term "Month" in the context of the leases and subleases did not equate to a "Calendar Month," but rather a named period. The notices of termination were thus interpreted to mean that vacant possession was required by 30 June 2022, which included the months of April, May, and June. Despite this, the court found that the notices were still valid and effective because they clearly communicated that the lessor was seeking vacant possession in accordance with the identified provisions of the leases and subleases. The court determined that the notices would make it clear to a reasonable recipient that the lessor was acting within the bounds of the agreements.

The final orders of the court confirmed that the notices of termination served by Mirvac were valid and effective, and that Value Lodging was required to vacate the premises by 30 June 2022. Value Lodging was directed to comply with the terms of the notices and vacate the premises accordingly.

Orders