Sandbank Holdings Pty Ltd v Durkan

Sandbank Holdings Pty Ltd, the lessor, brought an action against Durkan, the tenant, for unpaid rent and associated costs following a dispute over a commercial lease. The matter was heard in the Supreme Court of New South Wales. The central issue was whether the tenant was entitled to set off or deduct payments from the rent under a clause prohibiting such actions in the lease. Additionally, the court needed to determine if the contra proferentum rule applied and if the tenant could set off payments that were allegedly void or made by mistake. Another point of contention was the burden of proof regarding the conversion of tenant's fixtures and the validity of the award of nominal damages.

The court first examined the clause prohibiting set off or deduction and concluded it was clear and unambiguous, thus no application of the contra proferentum rule was necessary. It was held that the tenant could not set off payments that were allegedly void or made by mistake, as this would contravene the clear terms of the lease. Furthermore, the onus of proof was placed on the tenant to establish the conversion of their fixtures. The court found insufficient evidence to support the finding of such conversion. Regarding the award of nominal damages, the court determined that there was no basis for it in the evidence presented. Consequently, the award of nominal damages was overturned.

The court ultimately ruled in favour of the lessor, awarding unpaid rent and associated costs. The decision underscored the importance of clear lease terms and the necessity for tenants to provide sufficient evidence to support any claims of set off or conversion of fixtures. The overturning of the nominal damages award highlighted the need for a proper evidentiary foundation for such claims.