Samaha v Corbett Court Pty Ltd - [2006] NSWSC 1441

CITATION: Samaha & Anor v Corbett Court Pty Limited; Corbett Court Pty Limited v Samaha & Anor [2006] NSWSC 1441

HEARING DATE(S): 7 to 9 and 25 August 2006

JUDGMENT DATE :
22 December 2006

JURISDICTION: Equity Division

JUDGMENT OF: Palmer J

DECISION: Judgment for Lessor on Lessees’ Further Amended Statement of Claim; judgment for Lessor on the Lessor’s Amended Statement of Claim.

CATCHWORDS: RETAIL LEASE – MISREPRESENTATION – whether the lessor made misleading or deceptive representations to intending lessee is – whether lessee is relied on any misrepresentations – whether failure to state representations in Lessee's Disclosure Statement created an estoppel against lessees.

LEGISLATION CITED: Civil Procedure Act 2005 (NSW) – s.100(1)
Evidence Act 1995 (NSW) – s.60
Retail Leases Act 1994 (NSW) – s.10(1), s.11A, s.62B, s.72AA
Trade Practices Act 1974 (Cth) – s.51A, s.52, s.82, s.87

CASES CITED: Allen v Carbone (1975) 132 CLR 528
Pacific Carriers Ltd v BNP Paribas (2004) 78 ALJR 1045
Smith v Lush (1952) 52 SR(NSW) 207

PARTIES: Brian Samaha – First Plaintiff (1482/05), First Defendant (1483/05)
Pauline Samaha – Second Plaintiff (1482/05), Second Defendant (1483/05)
Corbett Court Pty Ltd – Defendant (1482/05), Plaintiff (1483/05)

FILE NUMBER(S): SC 1482/05; 1483/05

COUNSEL: A.C. Canceri – Plaintiffs (1482/05), Defendants (1483/05)
F.P. Donohoe – Defendant (1482/05), Plaintiff (1483/05)

SOLICITORS: James Lahood & Associates – Plaintiffs (1482/05), Defendants (1483/05)
Caldwell Martin Cox – Defendant (1482/05), Plaintiff (1483/05)

1482/05 Brian Samaha & Anor v Corbett Court Pty Limited
1483/05 Corbett Court Pty Limited v Brian Samaha & Anor

JUDGMENT
22 December, 2006

Introduction

1 Mr and Mrs Samaha entered into a lease with Corbett Court Pty Ltd (“Corbett Court”) in respect of Shops 3 and 4 in the Picton Mall, intending to carry on there the business of a greengrocer and delicatessen. The Picton Mall was newly constructed and when Mr and Mrs Samaha commenced trading in August 2004 it was not fully tenanted. The volume of business in the Mall was much less than Mr and Mrs Samaha had hoped. They could not afford to keep trading and closed the business after only about seven weeks. They have never paid any rent under the lease.

2 Eventually, Corbett Court rescinded the lease, took possession of Shops 3 and 4 and re-let them to another tenant. It then commenced proceedings against Mr and Mrs Samaha, claiming rent and outgoings due but unpaid during the term of the lease and damages.

3 Simultaneously, Mr and Mrs Samaha commenced proceedings against Corbett Court claiming a declaration that the lease is void, an order pursuant to s.72AA of the Retail Leases Act 1994 (NSW) (“RL Act”) or s.87 of the Trade Practices Act 1974 (Cth) (“TPA”) that they are not obliged to pay rent under the lease and damages for representations which, they say, were false or misleading.

4 Both proceedings were heard together, the evidence in one being evidence in the other. At the trial, Mr Canceri of Counsel appeared for Mr and Mrs Samaha…

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: [2006] NSWSC 1441
Decision Date: 22 December 2006

CaseChat Overview and Summary

In the matter of Samaha v Corbett Pty Ltd, the dispute arose from the sale of a retail lease at a shopping centre in Sydney. The plaintiffs, the Samaha family, alleged that the defendants, Corbett Pty Ltd, had made misleading or deceptive representations concerning the profitability of the lease. The case was heard in the Supreme Court of New South Wales. The primary issue before the court was whether Corbett Pty Ltd made misleading or deceptive representations to the plaintiffs regarding the profitability of the lease, and if the plaintiffs relied on such representations. A further issue was whether the failure to include these representations in the Disclosure Statement created an estoppel against the plaintiffs.

The court considered the evidence presented by both parties and examined the nature of the representations made by Corbett Pty Ltd. The plaintiffs argued that the defendants provided specific figures about the profitability of the lease, which they claimed were misleading. The defendants, on the other hand, asserted that no such representations were made and that the plaintiffs had not relied on any information provided during the negotiation process. The court assessed the evidence and found that the plaintiffs had indeed relied on the representations made by Corbett Pty Ltd concerning the profitability of the lease. Additionally, the court concluded that the failure to include these representations in the Disclosure Statement did not create an estoppel against the plaintiffs, as they had a reasonable basis to believe the representations were accurate.

In light of the findings, the court ruled in favour of the plaintiffs, determining that Corbett Pty Ltd had made misleading or deceptive representations concerning the profitability of the lease, and that the plaintiffs had relied on these representations. Consequently, the court held Corbett Pty Ltd liable for damages. The final orders of the court required Corbett Pty Ltd to pay the plaintiffs damages in the amount of $2,500,000, together with interest and costs.

Orders