(2007) NSW ConvR 56-172 (2007) ANZ Conv R 198 (2007) Aust Contract Reports 90-255
New South Wales
Supreme Court
CITATION:
Moratic Pty Ltd v Lawrence James Gordon & anor [2007] NSWSC 5
HEARING DATE(S):
21 December 2006
JUDGMENT DATE :
18 January 2007
JURISDICTION:
Equity Division
JUDGMENT OF:
Brereton J
DECISION:
Declaration that Plaintiff is not liable to pay to Defendants any amount pursuant to provisions of clause 20 of Lease registered number I271579 of the premises known as the Oaklands Hotel, Millthorpe Street, Oaklands. Cross-claim for arrears under clause 20 dismissed.
CATCHWORDS:
CONTRACT – Lease - Terms – implied terms – whether term should be implied that lessee’s covenant to pay “further rent” would not operate in certain circumstances - where covenant to same effect has been subject of judicial consideration – where implication would be inconsistent with basis on which covenant previously held valid – term not to be implied - Variation – whether lease varied by conduct to omit covenant to pay “further rent” - requirement for contractual intention and consideration – where parties did not advert to relevant term of lease – where suggested variation exclusively for benefit of plaintiff/lessee from whom no consideration moves - no contractual variation – ESTOPPEL – Promissory estoppel – whether defendant/lessor estopped from insisting on strict legal right to payment of “further rent” where plaintiff/lessee had relied to potential detriment on assumption that only rent payable was standard rent - where defendants neither induced plaintiff’s adoption of assumption, nor acquiesced in it with knowledge that reliance may cause detriment if it were not fulfilled - defendants not implicated to requisite degree in plaintiff’s adoption of and detrimental reliance on assumption to found equitable promissory estoppel – Conventional estoppel – where plaintiff and defendants adopt same assumption that only rent payable was standard rent – where lessor and lessee conducted their relationship on the basis of that assumption, and each knew that the other was doing so – where plaintiff would incur detriment if assumption were falsified - no requirement that either party know that the other may incur detriment by reliance on the assumption – conventional estoppel established and lessor not entitled to claim “further rent”.
LEGISLATION CITED:
(NSW) Gaming Machines Act 2001, s 19(1), (2)(a), (3)(c) (NSW) Liquor Act 1912, s 21(2) (NSW) Liquor Act 1982, Pt V, ss 80(2)(a), (3), 154 (NSW) Liquor and Registered Clubs Legislation Amendment Act 1997, Sch 1, paras [14], [19] (VIC) Licensing Act 1928, s 19
CASES CITED:
Ajayi v R T Briscoe (Nigeria) Limited [1964] 1 WLR 1326; [1964] 3 All ER 556 Allied Marine Transport Ltd v Vale Do Rio Doce Navegacao SA (The Leonidas) [1985] 1 WLR 925 Amalgamated Investment and Property Co Limited v Texas Commerce International Bank Limited (in liq) [1982] QB 84 Amherst v James Walker Ltd [1983] 1 Ch 305 BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266 Butts v O’Dwyer
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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AGLC
Moratic Pty Ltd v Gordon [2007] NSWSC 5
Case
[2007] NSWSC 5
Decision Date
CaseChat Overview and Summary
The matter before the court involved a dispute between Moratic Pty Ltd, the lessee, and Gordon, the lessor, regarding the interpretation and enforcement of the lease terms, specifically the obligation to pay "further rent". The court was tasked with determining whether certain terms should be implied into the lease, whether the lease had been varied by the conduct of the parties, and whether the lessor was estopped from enforcing the "further rent" obligation.
The primary legal issues before the court were whether an implied term should be inserted into the lease that the covenant to pay "further rent" would not operate in certain circumstances, whether the lease had been varied by the conduct of the parties to omit the "further rent" covenant, and whether the lessor was estopped from enforcing the "further rent" obligation. The court examined the principles of implied terms, variation of contracts, and both promissory and conventional estoppel in the context of the lease agreement.
In addressing these issues, the court found that an implied term should not be inserted as it would be inconsistent with the basis on which a similar covenant was previously held valid. Regarding the variation of the lease, the court determined that there was no contractual variation as the parties had not adverted to the relevant term and there was no consideration moving from the lessee. The court further found that the lessor was not estopped from enforcing the "further rent" obligation due to the lack of necessary inducement or acquiescence by the lessor. However, the court did establish a conventional estoppel, as both parties had adopted the same assumption that only standard rent was payable and acted on that assumption, with the lessee potentially incurring detriment if the assumption were to be falsified.
The court concluded that the lessor was not entitled to claim "further rent" due to the established conventional estoppel. No specific orders were made in relation to the other legal issues, as the court's determination on the estoppel was dispositive of the matter.