NTT Australia Digital Pty Ltd v Cover Genius Services Pty Ltd

The case before the court involved a dispute between NTT Australia Digital Pty Ltd and Cover Genius Services Pty Ltd regarding the assignment of a leasehold interest in a property located in Sydney. The respondent, Cover Genius, sought specific performance of a deed of assignment, which was executed but not delivered, in order to transfer the leasehold interest. The appellant, NTT, argued that specific performance was not appropriate and that damages in lieu were more suitable, particularly in light of the COVID-19 pandemic and the operation of special COVID-19 regulations. The matter was heard in the Supreme Court of New South Wales.

The primary legal issue before the court was whether the assignment of the leasehold interest was effectively delivered to the respondent. The court needed to determine if the execution of the deed of assignment, without its delivery, constituted a valid transfer of the leasehold interest. Additionally, the court had to consider whether the respondent was entitled to specific performance of the deed of assignment or if damages in lieu were more appropriate, particularly in light of the impact of the COVID-19 pandemic on the respondent’s ability to occupy the premises.

In its decision, the court held that the deed of assignment was not effectively delivered to the respondent, as it was not physically handed over or lodged in a manner that signified a transfer of the leasehold interest. The court emphasised that the physical delivery of the deed was a critical component of the assignment process. Furthermore, the court determined that specific performance was not an appropriate remedy in this case. The court found that damages in lieu were more suitable, given the respondent’s inability to occupy the premises due to the impact of the COVID-19 pandemic and the special regulations in place. The court considered the respondent’s financial position and the nature of the premises, concluding that damages in lieu would adequately compensate the respondent.

The court ordered that damages in lieu of specific performance be assessed, taking into account the impact of the COVID-19 pandemic and the special regulations on the respondent’s ability to occupy the premises. The court directed the parties to provide further information regarding the assessment of the damages, including the respondent’s financial position and the nature of the premises. The court did not grant specific performance of the deed of assignment, as it found that damages in lieu were more appropriate in the circumstances of the case.