New Imperial Pty Ltd v Falls Holdings Pty Ltd
[1992] TASSC 100
•17 June 1992
COURT: SUPREME COURT OF TASMANIA
CITATION: New Imperial Pty Ltd v Falls Holdings Pty Ltd [1992] TASSC 100; B23/1992
PARTIES: NEW IMPERIAL PTY LTD
v
FALLS HOLDINGS PTY LTD
FILE NO/S: 1776/1985
DELIVERED ON: 17 June 1992
JUDGMENT OF: Cox J
Judgment Number: B23/1992
Number of paragraphs: 39
Serial No B23/1992
List "B"
File No 1776/1985
NEW IMPERIAL PTY LTD v FALLS HOLDINGS PTY LTD
REASONS FOR JUDGMENT COX J
17 June 1992
Landlord and tenant – Whether misnomer of party an operative mistake – Whether failure of consideration – Whether agreement operated as lease or agreement for lease – Interest on amount claimed – Whether demand and notice of claim for interest given at same time – Supreme Court Civil Procedure Act 1932, s34.
This is a claim for arrears of rent and a proportion of municipal rates and land tax in respect of portion of a city property, the subject of a written agreement for lease, entered into between the plaintiff as lessor and the defendant as lessee.
The property, formerly known as the Imperial Hotel at 138 Collins Street, Hobart, was purchased by the defendant company (Falls Holdings) in about 1977. The managing director of that company was Mr Dennis Fall and the other directors were his brother Kenneth and his sister, Mrs Blackburn. It is common ground that Mr Dennis Fall ran the business affairs of the company, made all the important decisions and that his co–directors never dissented from a course advocated by him. Falls Holdings was incorporated in the early 1960's as was another company with substantially the same shareholding and board, Falls Electric and Home Furnishers Pty Ltd (Falls Electric); (both companies underwent some name changes but these are the relevant names for present purposes). Mr Dennis Fall had the same status and modus operandi in respect of Falls Electric as he had with Falls Holdings. The latter was intended to be the holding company, while the former carried on the business of a retail shop trading in electrical appliances and furnishings.
After the acquisition of the site by Falls Holdings, the property was occupied by a number of tenants. There were a doctor's consulting rooms, a hairdressing salon, a restaurant and some of the former hotel accommodation was occupied by several Moslem students. The principal tenant was Falls Electric which occupied more than 5,200 square feet on the ground and mezzanine floors and there conducted a retail shop. At all material times, the Falls companies had only one letterhead which was inscribed:
"Member of United Buying Associates Nat. Elect. Group Member of Alliance Buyers Co. Ltd. Nat. Furn. FC Group FALLS ELECTRIC & HOME FURNISHERS Pty Ltd reg. office: 360 main rd., glenorchy p.o. box 220, 7010 – INCORPORATING – falls glenorchy falls eastlands falls of collins st., 72 5555 44 3388 34 8333"
Correspondence from either company was invariably typed on that letterhead and where signed by Mr Dennis Fall, would have typed under his signature "D Fall, Managing Director". Apart from the text of any letter, nothing else indicated from which of the companies it emanated.
In the early 1960's Mr Charles Martin incorporated a company, "Charles Martin Constructions Pty Ltd" and he too set up other private companies in which members of his family held shares and directorships. He occupied in relation to his group of companies, which were concerned with building construction, a similar status of primacy and influence as did Mr Dennis Fall in respect of his. Shortly after Falls Holdings bought the Imperial site in 1977, Mr Dennis Fall met Mr Charles Martin in the street, and the latter told him he had been interested in acquiring the premises. In late 1983, Mr Fall was advised by his accountants to sell the site and it went to auction, but was not sold. Soon thereafter, approaches were made to Mr Martin and he again expressed interest in the property. On 23 December 1983, Mr Fall, on behalf of Falls Holdings, signed a document in these terms:
"In consideration of the payment of the sum of $ Two Hundred and Fifty Dollars ($250.00) by Charles Martin construction Pty Ltd to Falls Holdings Pty Ltd, Falls Holdings Pty Ltd hereby agrees that it will not before 30th April 1984 enter into a contract for the sale of a property situated at 138 Collins Street Hobart with any other purchaser. And after 30 April 84 it will not for a period of 30 days sell the property to any other person for less than $850,000 without first offering the same to C.M.C. at the same figure."
In the months following the agreement of 23 December 1983, Fall and Martin had a number of discussions. Martin had plans for renovating or extending the site and wished to be able to gain possession at relatively short notice for that purpose, but until he needed it, wished to have the premises tenanted. Hence there were discussions about Falls maintaining a presence after the sale, should one be agreed upon, and information was sought about what tenants were already in the premises.
On 26 January 1984, Mr Fall wrote to Mr Martin advising that the Moslem students would move out when the property was sold and under the heading, "Falls space requirements at 138 Collins Street", wrote, "We will be happy to commit for 5,000 square feet at $10.00 per square foot in the basement subject to details of tenancy being satisfactorily agreed to."
In early April 1984, Mr Fall wrote to the estate agent engaged by the defendant company, Martins Real Estate (which had no connection with the Charles Martin group of companies). The text of the letter was as follows:
"With reference to income received from students at 138 Collins Street, Hobart.
(1) Dr. Rich – $ 446.00 per month rent + rates annually.
(2) Hairdresser – $ 362.00 per month + $ 159.45 per month rates.
(3) Moslem students – overseas student accommodation.
$ 63,000 per annum to a maximum of 60 students.
This figure was subject to review as at the 26284, but the review was deferred due to an anticipation that the students would be requested to vacate the premises. There is some urgency that we clarify the position for the overseas student accommidation [sic] committee.
(4) Falls Electric & Home Furnishers PL –
Yours faithfully,
D Fall,
MANAGING DIRECTOR."
I find that the contents of that letter came to the attention of Mr Charles Martin before the end of that month and that he would have been aware that one of the Falls Group of companies was operating a retail store on the premises. From that letter he would have been led to understand that the name of the relevant company was Falls Electric and Home Furnishers Pty. Ltd., had he had occasion to consider the identity of the present and proposed tenant.
On 4 May 1984, Mr Fall and his real estate agent, Mr Terry Martin, went to see Mr Charles Martin at his office in Sandy Bay. Terry Martin brought with him a contract of sale on a standard Law Society form, with a number of clauses typed in. The agreement was expressed to be made between Falls Holdings, "the vendor" and Charles Martin Constructions Pty Ltd of 7A Magnet Court Sandy Bay, Tasmania or nominee, "the purchaser". The purchase price was left blank and a settlement date of 31 May 1984 typed in. On completion, receipt of rents and profits rather than vacant possession was provided for. Clause 14 was typed as follows:
"14. Falls Electric & Home Furnishers Pty Ltd will take a lease for years of 5, 00 square feet* of the subject premises at $10.00 per square foot per annum plus Municipal Rates and Land Tax. The specific area is that defined by Mr D. Fall and Mr T.C. Martin of Charles Martin Constructions Pty,. Ltd. (Refer Appendix Plan): It shall be a condition of such lease that the Lessee will freely vacate the premises at any time on receipt of four (4) months notice in writing from the Lessor to do so. Such lease to provide that the tenant shall have the right to assign or sublet to a responsible respectable and solvent person or company."
The second schedule, which was to include a description of any chattels to be included in the sale, was left blank.
At the meeting at which Mr Martin's son, also called Terrence, was present, the price of $720,000 was agreed upon and agreement was also reached that "Falls" should stay on as tenant but for a smaller area than hither to occupied. I use the expression "Falls" advisedly because I do not accept totally the version of Mr Fall who was the only witness called who was present at that part of the interview. He said in evidence, "We discussed the situation with regard to price and in particular that Charles wished Falls Electric and Home Furnishers Pty Ltd to remain as a tenant." While I accept that agreement was reached that the retail shop conducted by Mr Fall and his company should remain, I do not accept that Charles Martin stipulated by name who the tenant was to be. During the course of the negotiations the agent changed the settlement date to 7 June 1984 and added to clause 14 as typed, the words "with the consent of the lessor such consent not unreasonably withheld." It is not clear why he did so. The term of the lease was agreed at 5 years and the space at 5,200 square feet and these figures were also inserted by the estate agent.
When agreement had been reached in broad terms, Mr Charles Martin said he would like his solicitor, Mr KM Drake, to attend and check the contract. Mr Fall was unable to procure the attendance of his solicitor, but Mr Drake came and further discussions were held which resulted in additions being made in Mr Drake's hand to the contract. The purchaser wished to be able to develop an area at the rear of the retail store and to ensure access through it to that store. Mr Drake therefore added to clause 14, the words:
"Save as hereinbefore specifically provided the terms of lease shall be such terms as are commonly contained in leases of similar business premises and as the Purchaser's solicitors may reasonably require. The Lease shall provide that in the event that the Purchaser develops the area of 850m2 or thereabouts shown in the plan and surrounded by green lines for retail purposes the Vendor will permit customer access to and egress from that area through the area leased by him during the hours the Vendor is open for trading or ordinary business hours."
He also filled in schedule two which relevantly provides:
"It is intended that all the Vendor's blinds curtains floor coverings light fittings and chattels of every kind and whether of the nature of fixtures or otherwise (other than the chattels used by the Vendor in his retail store) are intended to pass to the Purchaser ..."
After these amendments had been made, the seal of each company was affixed, Falls Holdings' seal being attested by Mr Dennis Fall. Instructions were given by each party to its respective solicitors to implement the agreement.
Mr BM Levis received instructions to act for Falls Holdings and opened a file in that name. The conveyancing proceeded in the ordinary way. On 8 May 1984, Mr Fall wrote to Mr Charles Martin. Clause 14 had provided for a condition to be put into the lease:
"That the Lessee will freely vacate the premises at any time on receipt of four (4) months notice in writing from the lessor to do so."
Mr Fall's letter read as follows:
"With regards to the shortest notice that Falls Electric & Home Furnishers Pty Ltd would require to totally vacate 138 Collins Street Hobart.
We guarantee to totally vacate within 30 days of notice being given from or after 7.6.84.
This agreement is to supersede the requirement in the contract sale requiring 4 months notice and is to be treated as an addendum to the contract sale."
On 14 May 1984, he again wrote to Mr Martin giving details of depreciation of fittings and fixtures floor by floor. Under the heading, "Ground Floor" he wrote:
"Occupied by Falls Electric & Home Furnishers Pty Ltd The only fixtures and fittings to be transferred are curtains, carpet and light fittings and are subject to the depreciation schedule as set our [sic] in attachment A."
That schedule reads:
"FALLS HOLDINGS PTY. LTD.
SCHEDULE A
SCHEDULE OF DEPRECIATION 138 COLLINS ST. HOBART
CARPETS & CURTAINS $778
FIRE HOSES & REELS $4410
LIGHT FITTINGS DEPRECIATED TO NIL
TOTAL AS AT 7684 $5188"
On 29 May 1984, Mr Drake sent Mr Levis a conveyance and transfer (for it was a mixed title) for execution if approved and said he would forward the lease pursuant to cl.14 of the agreement within the next few days. The heading indicated that the purchaser nominated was to be the plaintiff company. On 6 June 1984, Mr Drake sent an agreement for lease. His letter read:
"re: Falls Holdings Pty Ltd and
The New Imperial Pty. Ltd.
Enclosed please find draft Agreement in the above matter and if in order please treat as an engrossment and have it signed."
The agreement for lease which was sent by Mr Drake and, subject to some amendments, executed by both parties, was expressed to be made between the plaintiff company as landlord and the defendant company, Falls Holdings, as tenant, rather than Falls Electric which was in fact the entity conducting the retail business at the premises. Eventually, in the following year, the premises were vacated with rent, rates and land tax in arrears to the extent of $20,181.79, or so it has been agreed for the purposes of the trial. Falls Electric, which was then insolvent and offering its creditors 25¢ in the dollar in satisfaction of their debts, claimed to be the true tenant and Falls Holdings denied any responsibility for the debt on the basis inter alia that there had been a mistake rendering the agreement for lease void ab initio.
It is true that cl 14 of the contract of sale had said that Falls Electric would take the lease and Mr Drake had no recollection of the circumstances in which he had inserted the name of Falls Holdings as tenant in the agreement for lease. At this distance in time I am not surprised that he has no such recollection of what was a fairly straightforward transaction, no doubt similar to many others he has conducted. I think the proper inference to be drawn from the matters recorded is that when he attended the meeting at the office of Charles Martin Constructions Pty. Ltd., he gained the impression from what was said there by Mr Fall and Mr Martin, that the vendor company, Falls Holdings, was the entity which conducted the retail business and was the logical and intended identity to take the lease. I can see no other reason why he should refer in his addition to cl.14 to the vendor giving access to the area which might be developed by the purchaser through the area leased by him during the hours "the Vendor is open for trading". Similarly, in the second schedule, chattels excluded from the sale were those "used by the Vendor in his retail store". The presence of these references to the vendor as the proposed tenant and conductor of the retail store, gainsays the proposition that Mr Fall in any way insisted or emphasised, at least in Mr Drake's presence, that it was Falls Electric. Whether when Mr Drake came to draw or settle the lease he adverted to the name Falls Electric at the beginning of cl.14 of the contract of sale but for some unexplained reason saw no conflict between it and the references to the vendor, or whether he simply overlooked it, it seems clear, and I so find, that he had fixed in his mind from the discussions with his client and Mr Fall, that the correct party was the vendor, Falls Holdings.
In due course, Mr Levis arranged for Mr Fall and his brother and co–director Kenneth, to come to his office to finalise the documentation for settlement. Mr Levis did not notice the discrepancy between the company named in cl.14 and that named in the lease, although he was, I find, aware of which company owned the property and which company was the trader. The conveyance and transfer from the owner, Falls Holdings, were duly executed by that company in the presence of the two directors and its seal duly affixed. The lease document was gone through by Mr Levis and the two brothers. Mr Dennis Fall pointed out that cl.5.6 contained a clause for rental review on each anniversary during the term and that such a clause had not been foreshadowed in the agreement for sale. Mr Levis rang Mr Drake, who conceded that the clause was not covered by the agreement and it was, accordingly, deleted. Mr Levis went through the terms of the document in summary with Mr Fall and he concurred with them, and the document was then executed, the seal of Falls Holdings to the knowledge of both directors and Mr Levis, being affixed to it.
There can be no doubt that no matter what the motivation, Falls Holdings, by its officers executed that document, knowing it to be what it was, knowing that it was the seal of that company, rather than Falls Electric, being affixed, and intending that Falls Holdings was to take the benefit and burden of the lease. As part of the arrangement, the tenant was to pay the landlord's legal costs and the stamp duty payable on the lease. Mr Drake had requested by way of an account dated 8 May 1984, but probably typed and delivered on 8 June 1984, when settlement took place, payment of $5,004.83. The account was addressed to Messrs. Norma Levis & Co, Solicitors, "re: Falls Holdings Pty Ltd leased to the New Imperial Pty. Ltd." and sought costs of $150.00 in respect of the lease, stamp duty on lease and counterpart, $521.50 and one month's rent in advance, namely $433.33. On settlement, Mr Levis was obliged, after discharging prior mortgages, to pay the balance to the vendor's bank, and consequently had no funds from which to pay the costs, stamp duty and rent. He sought instructions from Mr Fall and was instructed to pay the same out of the deposit when it was accounted for by the estate agent. That money was due to Falls Holdings as vendor, but Fall authorised recourse to it and told Mr Levis he would make entries in the books of the companies to effect an appropriate adjustment. On settlement, Mr Levis gave the landlord's solicitors an undertaking to pay the rent, costs and stamp duty upon receipt of the deposit. When he received it, he honoured that undertaking and accounted to Falls Holdings for the balance.
After settlement, Mr Drake's firm returned to Mr Levis the counterpart of the lease, by now stamped, and sent a copy to the plaintiff. Mr Levis retained his client's counterpart but did not send on a copy of it to Mr Fall or any of his companies.
The Martin group of companies, like that of Mr Fall, at all material times had only one printed letterhead which was used for correspondence on behalf of the plaintiff company and others within the group. The inscription it bore was "Charles Martin Constructions Pty. Ltd." On 19 June 1984, Charles Martin's son, Mr T.C. Martin, a director of Charles Martin Constructions Pty. Ltd., and also of the plaintiff company, wrote to Falls Electric confirming that the latter company was only committed to the rent on 5,200 square feet of floor area. This came as a response to a letter from Mr Fall on Falls Electric letterhead agreeing to continue to occupy the whole of the ground floor provided the company was only charged for the "5,000 square feet [sic] we have contracted for." By August 1984, another son of Charles Martin, Mr Robert Martin, had become a director of Charles Martin Constructions Pty Ltd and the plaintiff company. He sent a number of letters concerning rent received from various tenants of the premises. His correspondence was addressed to "Mr D. Fall, Falls Holdings Pty. Ltd." and made reference to rental payable by that company, rather than by Falls Electric. These letters were dated 17 August 1984 and 3 October 1984, while in March 1985, the plaintiff company gave the defendant company formal notice to quit at the expiration of thirty days. On 15 April 1985, the premises having been vacated, Robert Martin wrote again to Falls Holdings, calculating the balance owing and requesting a cheque by return. The rent between June 1984 and April 1985, save for the first month's rent sent by Mr Levis out of the deposit received on behalf of Falls Holdings, had been paid by cheques drawn on the account of Falls Electric. Some of these cheques were post–dated and not met on presentation and by April, the tenant was in arrears three months and had not met its proportion of rates and land tax.
On 8 May 1985, Mr Fall wrote to Charles Martin Constructions Pty Ltd advising that "negotiations are continuing for the sale of Falls Electric & Home Furnishers Pty. Ltd." and requesting it not to take any action at that time which might jeopardise the sale. On 22 May, he wrote again advising that James Loughran and Sons Pty Ltd had made an offer for "the company" which he had accepted, subject to the approval of creditors to a scheme of arrangement providing for settlement of unsecured debts by a payment of 25¢ in the dollar. On 23 May, Robert Martin wrote to Falls Holdings on behalf of the plaintiff, reminding the company of the arrears owing. On 5 June 1985, Mr Drake wrote to Falls Holdings demanding payment of the arrears and other monies payable under the lease quantified at $21,467.48. On 11 June 1985, Mr Levis replied to that letter. The relevant parts of his reply are as follows:
"You are aware that the contract for the sale to your client of 138 Collins Street, Hobart provided for the provision of a Lease from your client to Falls Electric and Home Furnishers Pty Ltd You erroneously drew the Lease in the name of Falls Holdings Pty Ltd and the misnomer was not detected by either the parties or their legal representative.
The premises have at all times been occupied by Falls Electric and Home Furnishers Pty Ltd which has also made all payments of rental. As well your client has at all times prior to the last mentioned company becoming involved, treated it as the tenant.
Our client accordingly denies liability for any moneys payable under the Lease and will defend any proceedings your client sees fit to take."
On 20 June 1985, the plaintiff's solicitors formally gave notice demanding interest on $21,467.48, pursuant to the Supreme Court Civil Procedure Act 1932, s.34.
Prima facie, there was clearly an executed agreement for lease enforceable against the tenant Falls Holdings. It may have been drawn by the plaintiff's solicitor Mr Drake nominating the defendant as the tenant as the result of a mistaken belief by him that Falls Holdings was conducting the retail business but, if that was the case, the plaintiff is not seeking to be relieved from the consequences of that error, and it is not open to the defendant to rely on an error the plaintiff regards as unimportant and inoperative. There was no mistake on the part of the defendant in executing the agreement for lease. A deliberate and conscious decision was made in Mr Levis' office by the directors of the defendant company to execute it in their capacity as directors of that company and to affix that company's seal to it. They could not have been mistaken about their own or the company's identity. They were not induced to execute the document by any fraud, misrepresentation or sharp practice by the plaintiff or any of its officers or agents. They may have been careless in not paying greater attention to the identity of the tenant, but I find there was no operative mistake on their part. Insofar as it is suggested in the defence that the defendant executed the agreement pursuant to a unilateral mistake and in reliance upon the representation of the plaintiff's solicitors that they were forwarding an agreement pursuant to cl 14 of the agreement for sale, I note that the only reference to forwarding an agreement pursuant to that clause appears in the letter of 29 May from Mr Drake to Mr Levis in which the former said, "We shall forward the lease pursuant to cl 14 of the agreement within the next few days." The sending of a draft agreement on 6 June and request that it be treated as an engrossment "if in order" in no way could be said to be a representation that that document was drawn precisely in accordance with, and in no material way departed from, cl 14 which was in any event, having regard to the references to the area leased by the vendor and to the hours the vendor was open for trading, an ambiguous clause. The plaintiff made no misrepresentation of fact inducing any mistake on the part of the defendant. As Isaacs J said in Goldsborough Mort & Co Ltd v Quinn (1910) 10 CLR 674 at pp695 – 696:
"Therefore the respondent's mistake, however he understood the terms he outwardly approved, and assuming the mistake to be bona fide, must have been due to his own want of care or reflection, in other words to his own negligence, and he is not to be allowed to impeach it to the prejudice of the other contracting party simply because he did mistake it. In such a case his mind must be judged by the external manifestation, which he put forward as the true index of his mental condition, and on the faith of which the other party acted to their own detriment, and to the benefit of the respondent."
The defence of mistake fails.
Then it is said that because the land, the subject of the agreement for lease, was at all material times occupied by Falls Electric, there was a total failure of consideration because the plaintiff landlord did not give possession to the tenant Falls Holdings, or alternatively in failing to give possession, the landlord was in breach of the agreement and repudiated it. In my view, there is no substance in these submissions. Falls Electric had been in occupation of a portion of the premises as tenant of Falls Holdings. Upon completion, the plaintiff agreed to demise the relevant portion to the defendant which knew that Falls Electric was in possession, took no steps to remove it, nor asked the plaintiff to do so and, as the evidence of Mr Cherney, the accountant for the Falls group shows, continued to receive rent from it under its previous arrangement whereby Falls Electric had paid certain expenses which Falls Holdings from time to time had to bear and in addition, Falls Electric, on some occasions, paid the rent to the plaintiff. If the defendant did not go into possession to the exclusion of any other occupier, it had a right to possession and chose not to enforce it, but to permit Falls Electric to occupy the premises. The lease contained a covenant for quiet enjoyment in these terms:
"4.2 Undisturbed Possession
That the tenant paying the rent reserved by this agreement and observing and performing the convenants and stipulations herein on their part contained shall peaceably hold and enjoy the premises during the term or any extension of the term without any interruption by the Landlord or any person lawfully claiming under or in trust for them."
In the circumstances, the continued presence of Falls Electric on the premises could not be said to amount to a breach of this covenant. There was, in my view, no failure of consideration, nor, in the absence of any request for exclusive possession, any repudiation by the plaintiff of its obligations under the lease.
A number of matters are alleged against the plaintiff to create an estoppel from asserting that the defendant was the tenant under the lease agreement. They were that:
"The acceptance of rent by the plaintiff from Falls Electric and the negotiations which were carried on with that company by the plaintiff as to the space that company was to occupy amounted to a representation to Mr Dennis Fall who was a director of both companies, and thereby to the defendant that the plaintiff was treating as its tenant Falls Electric rather than the defendant."
It is pleaded that:
"The defendant in reliance on the said representation allowed Falls Electric to continue in occupation and to conduct its business from the subject property and the defendant took no steps either to rectify or to enforce the agreement."
It should be noted that the first payment of rent was made by the defendant and all demands for, or reminders in respect of, arrears of rent were addressed by the plaintiff to that company. Having regard to the practice of both companies of using a single letterhead, although the subject matter might be relevant to a company not named thereon, the letters from Charles Martin Constructions Pty Ltd signed by Mr TC Martin, and addressed to Falls Electric, do not evidence any unequivocal negotiation on behalf only of that company. Even if they did, the subsequent letters, signed by Mr Robert Martin, and the notice to quit, unequivocally indicated that the plaintiff regarded the defendant as its tenant. The defence of estoppel is not made out.
Finally, the defendant pleads that the agreement dated 15 June 1984, if effective at all, was effective as an agreement for lease. The defendant pleads it was never called upon to execute a formal lease, never took possession, or did any other act or thing which obligated it to pay rent to the plaintiff. The document provided that the term of five years should commence on 8 June 1984, the day upon which the sale of the freehold had been settled. Such a stipulation favours the construction of the agreement as a lease (Hill and Redmonds, Landlord and Tenant, 12th ed, p88, citing Alderman v Neate (1839) 4 M & W 704 and Doe d Walker v Grimes (1812) 15 East 244). So too does the fact that all essential provisions are fixed and none is left for future ascertainment (ibid p87). Even where the document is only an agreement for lease, the legal relationship of landlord and tenant is created upon the payment of rent, in which case the agreement operates as a tenancy from year to year upon the terms therein set out so far as applicable to a yearly tenancy (ibid p85 citing Mann v Lovejoy (1826) Ry & M 355 and Richardson v Giffard (1834) 1 Ad & El 52). The fact that these parties intended the document to operate as an immediate lease, is further evidenced by their having stamped it as such. In my view, this defence fails.
The plaintiff is accordingly entitled to judgment in the agreed quantum of $20,181.79. It is also entitled to interest at the rate of 10% per annum from the date of its demand on 20 June 1985. It was submitted that interest is recoverable under the Supreme Court Civil Procedure Act 1932, s34(1)(b), only if the demand for the principal and interest are made contemporaneously. In this case, the plaintiff's solicitors made demand on the defendant by letter dated 5 June 1984, in the sum of $21,467.48 for arrears of rent, land tax and rates, and after correspondence with its solicitors, demanded, on 20 June 1984, interest "on the amount owing of $21,467.48 pursuant to s34" from that date. The section provides:
"34–(1) Upon all debts or sums certain recovered in any action, or on the trial of any issue of fact, the jury, or (in cases where there is no jury) the judge, or (in the case of an assessment of damages) the jury, judge, officer of the court, judge of an inferior court of civil jurisdiction, or referee making the assessment, may allow interest to the party recovering such debt or sum at the prescribed rate –
(a) from the time when such debt or sum was payable if payable by virtue of some written instrument and at a date or time certain; or
(b) if payable otherwise, then from the time when demand of payment was made in writing, giving notice to the debtor that interest would be claimed from the date of such demand or any later date."
In Geake v Ross (1875) 44 LJCP 315 at p318, Lord Colleridge CJ said of virtually equivalent legislation (3 & 4 Will V, Ch 42, s28):
"It appears to me, therefore, that all that is required to satisfy the enactment is that there should be a debt, a demand made of payment of such debt, and notice given at the time when the demand is so made, that interest will be payable from the debtor."
In the circumstances of this case, I think it would be idle to suggest that on 20 June 1984, when notice was given demanding interest on the amount owing, that the plaintiff's solicitors were not at the same time repeating its demand for payment of the debt. Their letter of 5 June to Falls Holdings was replied to by the latter's solicitors on 11 June with a denial of liability, the text of which is set out earlier in these reasons. That prompted a further letter from the plaintiff's solicitors to the defendant's solicitors on 17 June announcing their intention "to proceed in relation to arrears of rent and rates and taxes" and asking if the defendant's solicitors had instructions to accept service of a writ in respect thereof. It concluded with the statement:
"Should we have no reply by Thursday 20 June at 5 pm we shall be proceeding with the matter."
On 20 June, they sent the letter:
"We hereby give notice that we demand interest on the amount of $21,467.48 pursuant to section 34 of the Supreme Court Civil Procedure Act as from the 20th June 1985."
The next day, the writ was issued, together with a statement of claim, claiming that sum and interest pursuant to s34 as from 20 June 1985. In my view, there was a demand for that sum on 20 June and at the same time, notice was given that interest would be claimed from the date of that demand. I see no reason why I should not exercise the discretion I have to award interest. The fact that a slightly lower figure has been agreed between the parties as the correct amount due does not seem to me to be a proper basis for denying the plaintiff's claim for interest.
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