Portfolio Leasing v Nortel

[1999] NSWCA 136

CITATION:	Portfolio Leasing v Nortel [1999] NSWCA 136
FILE NUMBER(S):	CA 40214/98
HEARING DATE(S):	19 March 1999
JUDGMENT DATE:	19 March 1999
PARTIES :	Portfolio Leasing Australia v Nortel Australia Pty Limited
JUDGMENT OF:	Mason P at 15; Meagher JA at 1; Sheller JA at 19

LOWER COURT JURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S) :	10014/98
LOWER COURT JUDICIAL OFFICER:	Bruce J

COUNSEL:	Appellant:M. Skinner Respondent: B. Coles QC/ M.Young
SOLICITORS:	Appellant: Lincoln Smith & Company Respondent: Cowley Hearne
CATCHWORDS:	Stated case - lease of equipment - subsequent purchase of subject equipment - alleged ambiguity of terms.
DECISION:	Apeal allowed

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IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA: 40214/98

MASON P
MEAGHER JA
SHELLER JA

Friday 19 March 1999

PORTFOLIO LEASING AUSTRALIA v NORTEL AUSTRALIA PTY LIMITED
JUDGMENT

1 MEAGHER JA: This is a case which is an appeal from Mr Justice Bruce involving a dispute between a landlord and tenant of certain equipment. The matter first came before a learned Magistrate, Mr Beveridge, and he found in favour of the lessor of the equipment. From that decision a stated case was taken by Justice Bruce who reversed the learned Magistrate and found in favour of the lessee of the equipment.
2 In my view, if I may state it at the commencement of the case, the learned Magistrate was correct and His Honour was incorrect. The facts, which are fairly simple, are these:
3 On 14 February 1990 one item of equipment was leased by the lessor Portfolio Leasing Australia Limited to the lessee Nortel Australia Pty Limited. It was an agreement which ran for thirty six months from 14 February 1990 at a rental of $3,317 per month payable in advance.
4 On 14 March 1990 there was a second agreement between the same parties involving another piece of equipment. That agreement was for thirty-six months from 14 March 1990 at a rental of $672 per month payable monthly in advance.
5 The term of the first rental agreement expired on 14 February 1993. The term of the second agreement expired on 14 March 1993.
6 The lessee of the equipment Nortel paid rent under both agreements. Under the first one at the rate of $3,317 a month up until October 1993 and under the second rate of $672 per month up until the same date. The lessee of the equipment did not give to the lessor any notices in respect of either rental agreement nor did it ever return either of the goods to the lessor.
7 On 24 March 1994, the lessee paid nearly $10,000 to the lessor for the purchase of the goods the subject of the agreements. That agreement should be referred to in two respects. Clause 8 of the agreement contains two sub-paragraphs a) and b) as was suggested in argument by learned senior counsel for the respondent lessee. The first sub-paragraph hardly matters but the second sub-paragraph does in the…