Oxanda Childcare Pty Ltd v MAAG Developments Pty Ltd - [2018] VSC 370

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
COMMERCIAL LIST

S CI 2015 06246

OXANDA CHILDCARE PTY LTD (ACN 166 793 004) ATF THE OXANDA EDUCATION SERVICES TRUST	Plaintiff
v
MAAG DEVELOPMENTS PTY LTD (ACN 603 949 891)	Defendant

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	3 July 2018
DATE OF JUDGMENT:	13 July 2018
CASE MAY BE CITED AS:	Oxanda Childcare Pty Ltd v MAAG Developments Pty Ltd
MEDIUM NEUTRAL CITATION:	[2018] VSC 370

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LEASES AND TENANCIES – Agreement for Lease part of sale and lease-back arrangement – Construction of termination provisions – Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 – Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 – Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 – Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104.

WORDS AND PHRASES – Meaning of “and” and “or” – Associated Newspapers Ltd v Wavish (1956) 96 CLR 526 – Re The Licensing Ordinance (1968) 13 FLR 143 – Larwint Pty Ltd v Norwich Union Life Australia Ltd (2007) 15 VR 371 – Able Demolition & Excavations Pty Ltd v Yarra Ranges Shire Council [2008] VSC 294.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D.G. Collins QC with Mr T.E. Barry	Arnold Bloch Leibler
For the Defendant	Mr L. Glick QC with Ms C. Pierce	SBA Law

HIS HONOUR:

Introduction

This proceeding arises out of a contract for the sale of land at 19-21 Point Cook Road, Altona Meadows (“the Land”) by Oxanda Management Danke Pty Ltd (ACN 167 210 077) (“Oxanda Management”) to the Defendant, MAAG Developments Pty Ltd (ACN 603 949 891) (“MAAG”) dated 11 March 2015 (“the Contract of Sale”) and an agreement for MAAG to build and lease to the Plaintiff Oxanda Childcare Pty Ltd (ACN 166 793 004) ATF the Oxanda Education Services Trust (“Oxanda”) under an Agreement for Lease between MAAG and Oxanda dated 21 April 2015 (“the Agreement for Lease”) the Land for a childcare centre.

The issue which now remains for determination in this proceeding is whether MAAG was entitled to terminate the Agreement for Lease, which MAAG purported to do by letter dated 7 September 2015.

It is common ground that this issue is to be resolved as a matter of the proper construction of cl 2.1(e) of the Agreement for Lease, which entitled either party to terminate if certain approvals from the Hobsons Bay City Council (“the Council”) enabling the lawful construction of the childcare centre had not been obtained “and” (Oxanda contends) but “or” (as MAAG contends) MAAG had not completed its purchase of the land by a particular date. Thus, the question is whether these elements as the precondition for enlivening the right to terminate under cl 2.1(e) were separate and independent elements, each capable of enlivening such right, or cumulative so that both had to be satisfied before the right was enlivened.

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: [2018] VSC 370
Decision Date: 13 July 2018

CaseChat Overview and Summary

Oxanda Childcare Pty Ltd (Plaintiff) commenced an action against MAAG Developments Pty Ltd (Defendant) in the Supreme Court of Victoria. The dispute arose from a sale and lease-back arrangement concerning a childcare centre. The Plaintiff alleged that the Defendant breached the agreement by terminating the lease without proper cause, while the Defendant claimed that the termination was justified under the terms of the agreement. The central issue before the court was whether the Defendant was entitled to terminate the lease based on the termination provisions in the agreement and the construction of those provisions.

The court examined the language of the termination clause and the relevant case law to determine its meaning and application. The court considered the principles from Pacific Carriers Ltd v BNP Paribas, Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd, Electricity Generation Corporation v Woodside Energy Ltd, and Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd to ascertain the appropriate test for determining whether the Defendant had the right to terminate the lease. The court also considered the interpretation of the words "and" and "or" in the termination clause, applying the principles from Associated Newspapers Ltd v Wavish, Re The Licensing Ordinance, Larwint Pty Ltd v Norwich Union Life Australia Ltd, and Able Demolition & Excavations Pty Ltd v Yarra Ranges Shire Council.

The court found that the Defendant was entitled to terminate the lease based on the proper construction of the termination provisions in the agreement. The court held that the Defendant had satisfied the conditions for termination as outlined in the agreement, and the Defendant's actions were not in breach of any legal principles. Accordingly, the Defendant was justified in terminating the lease. The court dismissed the Plaintiff's claim and ordered the Plaintiff to pay the Defendant's costs of the proceeding.

Orders