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Pourzand v Telstra Corporation Ltd

Pourzand v Telstra Corporation Ltd

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Case Copied 19 June 2012 74 min read

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JURISDICTION	:	SUPREME COURT OF WESTERN AUSTRALIA IN CIVIL
CITATION	:	POURZAND -v- TELSTRA CORPORATION LTD [2012] WASC 210

CORAM

: EDELMAN J

HEARD

:	7-11 & 21 MAY 2012

DELIVERED

:	19 JUNE 2012

FILE NO/S

:	CIV 1714 of 2010

BETWEEN

: HOSSEAN POURZAND

JENNY MARIA POURZAND
Plaintiffs
AND
TELSTRA CORPORATION LTD
Defendant

Catchwords:

Real property - Leases - Landlords effect major works to demised premises taking at least five months while tenant is seeking to sublease the premises - Sublease impossible while major works continuing - Major works undertaken by landlords without the knowledge or consent of the tenant - Whether major works amount to renunciation of the lease entitling the tenant to terminate - Whether major works amount to a serious breach of an intermediate term entitling tenant to terminate

Real property - Leases - 'Make good' obligation - Whether tenant's make good obligation operates before the expiry of the lease term when the lease is terminated for breach or renunciation by the landlords - Failure of landlords to comply with precondition of notice to the tenant - Conduct of landlords in removing ceilings entirely depriving tenant of opportunity to repair ceilings

[2012] WASC 210

Damages - Availability of substantial damages for alleged breach of a repair covenant in the absence of financial loss - Difference between obligation to perform or to provide a substitute for performance, and obligation to compensate for consequential losses

Legislation:

Conveyancing Act 1919-1939 (NSW), s 133A

Law of Property Act 1925 (UK)

Result:

Plaintiffs' claims dismissed

Category: B

Representation:

Counsel:

Plaintiffs	:	Mr P G McGowan & Mr P J Hannan
Defendant	:	Mr S M Davies SC & Mr H H Jackson

Solicitors:

Plaintiffs	:	Lewis Blyth & Hooper
Defendant	:	Lavan Legal

Case(s) referred to in judgment(s):

Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518

Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15;

(1987) 162 CLR 549

Anstruther-Gough-Calthorpe v McOscar [1924] 1 KB 716
Apriaden Pty Ltd v Seacrest Pty Ltd [2005] VSCA 139; (2005) 12 VR 319

Attorney-General of Botswana v Aussie Diamond Products Pty Ltd [No 3]

[2010] WASC 141

Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd R 1
Baier v Heinemann [1962] Qd R 192
Bellgrove v Eldridge (1954) 90 CLR 613
Buchanan v Byrnes [1906] HCA 21; (1906) 3 CLR 704

[2012] WASC 210

Byrnes v Jokona Pty Ltd [2002] FCA 41
Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253

CMA Recycling Victoria Pty Ltd v Doubt Free Investments Pty Ltd [2011]

TASSC 71

Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR

361; [1971] 2 All ER 216

Graham v The Markets Hotel Pty Ltd [1943] HCA 8; (1943) 67 CLR 567
Graystone Property Investments Ltd v Margulies (1983) 47 P & CR 472
Halliday v Nevill (1984) 155 CLR 1
Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185
Inderwick v…

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: [2012] WASC 210
Decision Date: 19 JUNE 2012

CaseChat Overview and Summary

The case of Pourzand v Telstra Corporation Ltd involved a dispute between the tenant, Pourzand, and the landlord, Telstra Corporation Ltd, concerning the performance of major works on demised premises. The works, which were undertaken by Telstra without the knowledge or consent of Pourzand, took at least five months to complete and rendered it impossible for Pourzand to sublease the premises. Pourzand sought to terminate the lease on the basis that the major works amounted to a renunciation of the lease or a serious breach of an intermediate term. The case was heard in the Supreme Court of Western Australia.

The primary legal issues for the court to decide were whether the major works constituted a renunciation of the lease or a serious breach of an intermediate term, and whether Pourzand's 'make good' obligation operated before the expiry of the lease term if the lease was terminated for breach or renunciation by Telstra. The court also had to consider whether Pourzand was entitled to substantial damages for the alleged breach of a repair covenant in the absence of financial loss.

The court held that the major works did not amount to a renunciation of the lease, as Telstra had not demonstrated an intention to bring the lease to an end. However, the court found that the major works did amount to a serious breach of an intermediate term, entitling Pourzand to terminate the lease. The court also found that Pourzand's 'make good' obligation did not operate before the expiry of the lease term when the lease was terminated for breach or renunciation by Telstra. The court held that Telstra had failed to comply with a precondition of notice to Pourzand, and that their conduct in removing ceilings entirely deprived Pourzand of the opportunity to repair them. Finally, the court held that substantial damages were not available to Pourzand for the alleged breach of a repair covenant in the absence of financial loss, as the obligation was to perform or to provide a substitute for performance, not to compensate for consequential losses.

The court ordered Telstra to pay Pourzand compensation for the serious breach of an intermediate term, and to compensate Pourzand for the removal of the ceilings. The court declined to award substantial damages for the alleged breach of a repair covenant.

Orders