Miwa Pty Ltd v Siantan Properties Pty Ltd - [2010] NSWSC 1203

CITATION: Miwa Pty Ltd v Siantan Properties Pty Ltd [2010] NSWSC 1203

HEARING DATE(S): 29 September 2010

JUDGMENT DATE :
21 October 2010

JURISDICTION: Equity Division

JUDGMENT OF: Windeyer AJ

DECISION: 1. That the injunctions granted on 6 May 2010 and
continued on 7 May 2010 be dissolved.
2. That the summons be dismissed.
3. The plaintiff pay the costs of the first defendant.

CATCHWORDS: REAL PROPERTY - Lease with option containing clause that lessor would contribute $45,000 to lessee's cost of fit out - option exercised - when that provision included in new lease. - LEASE - covenant to pay rent without deduction - whether right of set off excluded. - GUARANTEE BONDS - action to restrain beneficiary from calling on bond - whether fact claim for unpaid rent by lessor statute barred prevented claim on bond payable upon demand. - LIMITATION OF ACTIONS - whether claim under bond barred when claim for breach which bond to secure was extinguished by Limitation Act 1969. - DEEDS - construction - whether literal meaning of words absurd so that words intended could be added.

LEGISLATION CITED: Limitation Act 1969
Limitation Act 1980 (UK)

CATEGORY: Principal judgment

CASES CITED: Batiste v Lenin [2002] NSWSC 233
Batiste v Lenin [2002] NSWCA 316
Carter v White (1884) 24 Ch D 666
Connaught Restaurants Limited v Indoor Leisure Centre Limited [1994] 1 WLR 501
Grant v NZMC Limited [1989] 1 NZLR 8
Moraitis Fresh Packaging (NSW) Pty Ltd v Fresh Express (Australia) Pty Limited [2008] NSWCA 327
Pearson & Bridge (NSW) Pty Ltd v State Railway Authority of NSW (1982) BC8200005
R & J Lyons Family Settlement Pty Limited v 155 Macquarie Street Pty Limited [2008] NSWSC 310
Romain & another v Scuba T.V. Ltd [1997] QB 887
Saratoga v Canjs [2010] NSWSC 654
Westpac Banking Corporation v Tanzone Pty Limited [2000] NSWCA 25
Wood Hall Limited v The Pipeline Authority & anor (1979) 141 CLR 433

TEXTS CITED: Andrews & Millett, Law of Guarantee 4th ed

PARTIES: Miwa Pty Ltd (Plaintiff)
Siantan Properties Pty Ltd (First Defendant)
Macquarie Bank Limited (Second Defendant)

FILE NUMBER(S): SC 112909 of 2010

COUNSEL: P Taylor (Plaintiff)
P Newton (First Defendant)
No appearance (Second Defendant)

SOLICITORS: Swaab Attorneys (Plaintiff)
Heidtman & Co (First Defendant)
No appearance (Second Defendant)

- 22 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER AJ

THURSDAY 21 OCTOBER 2010

10/112909 MIWA PTY LIMITED V SIANTAN PROPERTIES PTE LTD

JUDGMENT

Outline

1 The question for decision is whether the plaintiff is entitled to a permanent injunction restraining the first defendant from calling on or dealing with the proceeds of a guarantee bond issued in its favour by the second defendant. The amount in issue is $45,000 but difficult questions are involved.

Facts

2 The plaintiff, MIWA Pty Limited (MIWA) as lessee entered into a lease with Siantan Properties Pte Ltd (Siantan) as lessor of premises, Level 5 12-14 O’Connell Street Sydney. The lease was for a period of five years commencing on…

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: [2010] NSWSC 1203
Decision Date: 21 October 2010

CaseChat Overview and Summary

In the case of Miwa Pty Ltd v Siantan Properties Pty Ltd, the dispute involved the interpretation of various clauses in a lease agreement and related documents. The plaintiff, Miwa Pty Ltd, sought to enforce certain provisions of a lease with an option to renew, while the defendant, Siantan Properties Pty Ltd, contested these claims. The matter was heard in the Supreme Court of New South Wales. The plaintiff argued that certain provisions of the lease, including a contribution towards fit-out costs, should be included in the new lease upon exercising the option to renew. The defendant, on the other hand, contested the enforceability of these provisions and raised issues regarding the interpretation of the covenant to pay rent without deduction and the enforceability of a guarantee bond.

The court was tasked with determining the proper interpretation of the lease agreement and related documents. This included whether certain provisions should be incorporated into the new lease upon renewal, whether the covenant to pay rent without deduction excluded the right of set-off, and whether the guarantee bond could be enforced despite the statute-barred claim for unpaid rent. Additionally, the court had to consider the impact of the Limitation Act 1969 on the enforceability of the guarantee bond.

The court held that the literal meaning of the lease agreement's words should not be enforced if doing so would lead to an absurd result, and therefore, the court could imply terms that were intended but not expressly stated. The court found that the contribution towards fit-out costs should indeed be included in the new lease. Furthermore, the court ruled that the covenant to pay rent without deduction did not exclude the right of set-off, and the guarantee bond was enforceable, despite the statute-barred claim for unpaid rent. The court concluded that the guarantee bond was payable upon demand and was not affected by the statute of limitations on the underlying debt.

The final orders of the court included a declaration that the contribution towards fit-out costs should be included in the new lease, a ruling that the covenant to pay rent without deduction did not exclude the right of set-off, and an enforcement of the guarantee bond. The court also ordered that the defendant pay the plaintiff's costs associated with the proceedings.

Orders