Re Woolworths (Qld) Pty Ltd - [1998] QSC 246

IN THE SUPREME COURT

OF QUEENSLAND No. 9507 of 1998

Brisbane

[Re Woolworths (Qld) Pty Ltd]

IN THE MATTER of Order 64 rule 1A and Order 64 rule 1BB of the Rules of the Supreme Court
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IN THE MATTER of a Lease between PERMANENT TRUSTEE AUSTRALIA LIMITED (ACN 008 412 913) and WOOLWORTHS (Q’LAND) PTY LIMITED (ACN 000 034 819)
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IN THE MATTER of an application by WOOLWORTHS (Q’LAND) PTY LIMITED (ACN 000 034 819)

REASONS FOR JUDGMENT - MOYNIHAN J.

Judgment delivered 6 November 1998

This is an application pursuant to O.64 for the determination of the construction of a clause in a lease and for a declaration that specified notices are not in accordance with the clause.
The respondent owns two parcels of land at Toowong. The parcels are not adjacent. It is convenient to refer to them collectively as the Toowong land. The respondent is desirous of accepting an offer to purchase its Toowong land. One of the parcels (the subject premises) is subject to a registered lease to the applicant who conducts a supermarket and associated carpark on the land leased to it. Clause 3 of the lease - which extends to a lease as well as a sale in circumstances it is presently unnecessary to consider - relevantly provides:-

“(a)If at any time during the term of this lease the Lessor shall be desirous of selling the demised premises or any part thereof . . . the Lessee . . . shall have the right to purchase . . . the demised premises or such part thereof upon the following conditions:
(i)The Lessor shall first give notice in writing to the Lessee specifying the part of the demised premises which the Lessor desires to sell . . . (hereinafter called “the subject premises”) and with such notice there shall be delivered to the Lessee the form of contract for sale . . . containing the terms and conditions upon which the subject premises are offered to the Lessee for sale . . .
(ii)The Lessee if it desires to purchase . . . the subject premises upon the terms and conditions so offered shall within one month after the receipt of such notice cause to be delivered to the Lessor the said form of contract . . . duly executed by the Lessee . . .”.

The clause goes on to provide to the effect that if the lessee does not accept the offer in the prescribed manner or irrevocably rejects it within the period of one month, the lessor is at liberty to sell “the subject premises” on terms and conditions no more favourable to the proposed purchaser than those offered to the lessee.

The respondent, having received the offer for the Toowong land which it was desirous of accepting, purported, by a notice of 19 October 1998, to give the applicant notice pursuant to cl.3(a)(i) of its intention to sell the Toowong land on terms and conditions…

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.

Continue reading Re Woolworths (Qld) Pty Ltd

Details

AGLC: Re Woolworths (Qld) Pty Ltd [1998] QSC 246
Case: [1998] QSC 246
Decision Date: 6 November 1998

CaseChat Overview and Summary

In this matter, Permanent Trustee Australia Limited sought a declaration that notices given by Woolworths (Qld) Pty Ltd were not in accordance with a clause in a lease agreement. The dispute concerned the interpretation of a lease clause that gave Woolworths the right to purchase the leased premises if Permanent Trustee Australia Limited decided to sell. The Supreme Court of Queensland was tasked with determining the correct interpretation of the clause and whether the notices given by Woolworths complied with it.

The primary legal issue was the interpretation of Clause 3 of the lease, which provided Woolworths with a right of first refusal to purchase the leased premises if the landlord wished to sell. The dispute centred on whether this clause allowed the landlord to include the sale of additional land not covered by the lease in the notice and contract of sale offered to Woolworths. The court had to decide whether the clause was ambiguous and if it permitted the landlord to sell additional land not part of the leased premises.

The Court found that Clause 3 was not ambiguous and did not permit the landlord to include the sale of additional land not part of the leased premises in the notice and contract of sale. The Court held that the clause was specific to the sale of the subject premises and did not extend to other land. The notices given by Woolworths on 19 October and 21 October 1998 were therefore not in accordance with Clause 3(a)(i) of the lease. The Court also ruled that the clause was enforceable as it would be unconscionable for the landlord to repudiate it.

The Court declared that the notices given by Woolworths on 19 October and 21 October 1998 were not notices pursuant to Clause 3(a)(i) of the lease and that the landlord could not include the purchase of additional land not part of the demised premises in the notice or contract of sale.

Orders