Mossop v Carpet Call (Vic) Pty Ltd - [2009] SADC 89

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MOSSOP & OTHERS v CARPET CALL (VIC) PTY LTD
[2009] SADC 89
Judgment of His Honour Judge Rice
21 August 2009
LANDLORD AND TENANT - LEASES AND TENANCY AGREEMENTS
Lease between the parties provided for two options to renew, each of three years - First right of renewal exercised within period provided - Lease renewal signed by both parties - Second right of renewal purported to be exercised outside the period provided but in exactly the same terms as the first - Both parties acted on the basis that it was intended to be a valid exercise of the second right of renewal - Documentation for the lease renewal prepared but, by oversight, not signed - Lessee later claimed to be a monthly tenant only - Lessee disputes a valid exercise of the second right of renewal - Terminates.
Held: Lessee bound by the second right of renewal - Valid agreement to lease in any event - Damages to the lessor for rent and outgoings.
Elizabeth City Centre Pty Ltd v Corralyn Pty Ltd (1994) 63 SASR 235 at 236-7; United Scientific Holdings Limited v Burnley Borough Council [1978] AC 904; Hare v Nicoll [1966] 2 QB 130; Traywinds Pty Ltd v Cooper [1989] 1 Qd R 223; Gilber J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1959) 59 SR (NSW) 122; Abjornson v Urban Newspapers Pty Ltd [1989] WAR 191; Re Copperart Pty Ltd (1995) 16 ACSR 351 at 357; Duncan Properties Pty Ltd v Hunter (1991) 1 Qd R 101 at 106; Prudential Assurance Co Ltd v Health Minders Pty Ltd (1987) 9 NSWLR 673 at 677; Walton Stores (Interstate) Limited v Maher and Another (1987-1988) 164 CLR 387; Re Eastdoro Pty Ltd [1989] 2 Qd R 182 at 184, considered.

MOSSOP & OTHERS v CARPET CALL (VIC) PTY LTD
[2009] SADC 89
Introduction

This is a dispute as to whether the lease of warehouse premises was renewed for a second time pursuant to a Memorandum of Lease. The lessor plaintiffs say it was renewed and seek damages for rent, outgoings and repairs for the period from when the premises were vacated until they were re-let. The lessee defendant says there was no second renewal, that it was a tenant on a monthly basis and has no liability in damages. This case is different than the usual run of cases in this area where a lessee is seeking to enforce an alleged renewal against a lessor.
The background facts need to be considered in some detail. As will be referred to below, the defendant was permitted to make a “no case” submission without electing. The plaintiffs then responded to that submission. Without ruling on the submission, I called upon the defendant to elect. The defendant elected to call no evidence. I then took final submissions and reserved my decision.
The only oral evidence given in the case was by Mr N. Mossop on behalf of all plaintiffs. Mr…

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: [2009] SADC 89
Decision Date: 21 August 2009

CaseChat Overview and Summary

The case of Mossop v Carpet Call (Vic) Pty Ltd involved a dispute between a landlord and tenant regarding the renewal of a lease agreement. Carpet Call (Vic) Pty Ltd, the lessor, leased a property to Mossop, the lessee. The lease contained an option for two renewals, each for a three-year term. Mossop exercised the first renewal option within the stipulated timeframe, and a new lease agreement was signed by both parties. However, when the second renewal option was to be exercised, Mossop purported to exercise it outside the specified period but in the same terms as the first renewal. Both parties acted on the basis that this was a valid exercise of the second renewal option, and documentation for the renewal was prepared but not signed. Subsequently, Mossop claimed that there was no valid exercise of the second renewal option and sought to terminate the lease.

The legal issues before the court were whether Mossop was bound by the purported exercise of the second renewal option and whether a valid lease agreement had been formed in any event. The court considered the conduct of the parties, the terms of the lease, and the applicable authorities to determine the validity of the renewal and the rights and obligations of the parties. The court found that the conduct of both parties and the documentation prepared indicated an intention to renew the lease under the same terms as before. The court also found that a valid agreement to lease had been formed, and that Mossop was bound by the purported exercise of the second renewal option. The court ordered Mossop to pay damages for unpaid rent and outgoings to Carpet Call (Vic) Pty Ltd.

The court's decision was based on the principle that where there is an intention to renew a lease, and the parties act on that intention, the renewal will be binding on both parties. The court found that there was an intention to renew the lease, and that both parties had acted on that intention. The court also found that the failure to sign the documentation for the renewal did not affect the validity of the agreement. The court ordered Mossop to pay damages for unpaid rent and outgoings to Carpet Call (Vic) Pty Ltd, reflecting the loss suffered by the lessor due to Mossop's breach of the lease agreement.

Orders