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Miwa Pty Ltd v Siantan Properties Pte Ltd

Miwa Pty Ltd v Siantan Properties Pte Ltd

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Case Copied 19 September 2011 40 min read

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Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297
Hearing dates: 16 June 2011
Decision date: 19 September 2011
Before: McColl JA at 1;
Basten JA at 2;
Campbell JA at 51
Decision:
(1) Grant leave to appeal and direct that, within 7 days, the applicant file a notice of appeal in the terms of the draft notice contained in the white folder.
(2) Allow the appeal and set aside orders made by Windeyer AJ on 21 October 2010.
(3) Order that the first respondent be permanently restrained from making any demand in writing on Macquarie Bank Ltd pursuant to the guarantee given on 15 April 1996 numbered 323/03 96.
(4) Order that the first respondent forthwith deliver the original of the bank guarantee referred to in the previous order to the appellant at its address for service in these proceedings.
(5) Order that the first respondent pay the appellant's costs of the proceedings in this Court and in the Court below.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
LANDLORD AND TENANT - construction of lease - option to renew - whether lease required lessor to make payment on lessee's exercise of option to renew - whether such a result absurd

EQUITY - lease - unpaid amount due from lessor - whether lessee entitled to recoup the amount by deduction from the rent - right of recoupment, set-off, abatement or reduction

LANDLORD AND TENANT - whether the lessor was entitled to call upon the bank to pay the guarantee, after the expiration of the limitation period with respect to the debts due by way of unpaid rent - whether there was a negative stipulation, express or implied, precluding the lessor from calling upon the guarantee - Limitation Act 1969 (NSW), ss 24(1) and 63
WORDS AND PHRASES - "without deduction"
Legislation Cited: Civil Procedure Act 2005 (NSW), s 22
Limitation Act 1969 (NSW), ss 11, 24, 63
Supreme Court Act 1970 (NSW), s 101
Cases Cited: Batiste v Lenin [2002] NSWSC 233; 10 BPR 19441
Batiste v Lenin [2002] NSWCA 316
Batshita International (Pte) Ltd v Lim [1997] SLR 241
British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] 1 QB 137
Clough Engineering Ltd v Oil and Natural Gas Corporation Ltd [2008] FCAFC 136; 249 ALR 458
Concrete Constructions v Dalma Formwork [1999] NSWCA 16
Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 WLR 501
Cook v Cook (1986) 162 CLR 376
Courage Ltd v Crehan [1999] ECC 455
Edlington Properties Ltd v JH Fenner & Co Ltd [2006]…

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: [2011] NSWCA 297
Decision Date: 19 September 2011

CaseChat Overview and Summary

In *Miwa Pty Ltd v Siantan Properties Pte Ltd*, the New South Wales Court of Appeal considered a dispute between a landlord and a tenant concerning the construction of a lease agreement and the enforceability of a bank guarantee. The tenant, Miwa Pty Ltd, sought to appeal a decision that had allowed the landlord, Siantan Properties Pte Ltd, to call upon a bank guarantee.

The primary legal issues before the Court of Appeal were whether the lease required the landlord to make a payment to the tenant upon the tenant's exercise of an option to renew, whether the tenant was entitled to recoup an unpaid amount due from the landlord by way of deduction from rent, and whether the landlord was entitled to call upon the bank guarantee after the expiration of the limitation period for the debts due by way of unpaid rent. The Court also considered whether there was an express or implied negative stipulation precluding the landlord from calling upon the guarantee.

The Court of Appeal found that the construction of the lease, which would require the landlord to make a payment upon the tenant's exercise of the option to renew, was not absurd. It determined that the tenant was entitled to recoup the unpaid amount by way of deduction from the rent, effectively setting off the landlord's debt against the rent owed. Furthermore, the Court held that the landlord was not entitled to call upon the bank guarantee for debts that were statute-barred.

Consequently, the Court of Appeal allowed the appeal, set aside the orders of the primary judge, and permanently restrained the landlord from making any demand on the bank pursuant to the guarantee. The landlord was also ordered to deliver the original bank guarantee to the tenant and to pay the tenant's costs of the proceedings in both the Court of Appeal and the court below.

Orders

Orders of the court

(1) Grant leave to appeal and direct that, within 7 days, the applicant file a notice of appeal in the terms of the draft notice contained in the white folder.

(2) Allow the appeal and set aside orders made by Windeyer AJ on 21 October 2010.

(3) Order that the first respondent be permanently restrained from making any demand in writing on Macquarie Bank Ltd pursuant to the guarantee given on 15 April 1996 numbered 323/03 96.

(4) Order that the first respondent forthwith deliver the original of the bank guarantee referred to in the previous order to the appellant at its address for service in these proceedings.

(5) Order that the first respondent pay the appellant's costs of the proceedings in this Court and in the Court below.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

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

Full text does not contain this section.

Medium Neutral Citation:	Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297
Hearing dates:	16 June 2011
Decision date:	19 September 2011
Before:	McColl JA at 1; Basten JA at 2; Campbell JA at 51
Decision:	(1) Grant leave to appeal and direct that, within 7 days, the applicant file a notice of appeal in the terms of the draft notice contained in the white folder. (2) Allow the appeal and set aside orders made by Windeyer AJ on 21 October 2010. (3) Order that the first respondent be permanently restrained from making any demand in writing on Macquarie Bank Ltd pursuant to the guarantee given on 15 April 1996 numbered 323/03 96. (4) Order that the first respondent forthwith deliver the original of the bank guarantee referred to in the previous order to the appellant at its address for service in these proceedings. (5) Order that the first respondent pay the appellant's costs of the proceedings in this Court and in the Court below. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	LANDLORD AND TENANT - construction of lease - option to renew - whether lease required lessor to make payment on lessee's exercise of option to renew - whether such a result absurd EQUITY - lease - unpaid amount due from lessor - whether lessee entitled to recoup the amount by deduction from the rent - right of recoupment, set-off, abatement or reduction LANDLORD AND TENANT - whether the lessor was entitled to call upon the bank to pay the guarantee, after the expiration of the limitation period with respect to the debts due by way of unpaid rent - whether there was a negative stipulation, express or implied, precluding the lessor from calling upon the guarantee - Limitation Act 1969 (NSW), ss 24(1) and 63 WORDS AND PHRASES - "without deduction"
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 22 Limitation Act 1969 (NSW), ss 11, 24, 63 Supreme Court Act 1970 (NSW), s 101
Cases Cited:	Batiste v Lenin [2002] NSWSC 233; 10 BPR 19441 Batiste v Lenin [2002] NSWCA 316 Batshita International (Pte) Ltd v Lim [1997] SLR 241 British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] 1 QB 137 Clough Engineering Ltd v Oil and Natural Gas Corporation Ltd [2008] FCAFC 136; 249 ALR 458 Concrete Constructions v Dalma Formwork [1999] NSWCA 16 Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 WLR 501 Cook v Cook (1986) 162 CLR 376 Courage Ltd v Crehan [1999] ECC 455 Edlington Properties Ltd v JH Fenner & Co Ltd [2006]…