Shimden Pty Ltd v Park Pty Ltd - [2022] NSWSC 267

Supreme Court

New South Wales

Medium Neutral Citation: Shimden Pty Ltd v Park Pty Ltd [2022] NSWSC 267
Hearing dates: 1-2 March 2022
Date of orders: 15 March 2022
Decision date: 15 March 2022
Jurisdiction: Equity
Before: Darke J
Decision:
Landlord held entitled to claim outstanding amounts of rent, but not outgoings, from tenant.

Catchwords:
REAL PROPERTY – leases – construction of lease – whether rent amount is inclusive or exclusive of GST – where lessor claims unpaid components of rent due to erroneous invoices and failure to adjust for movement in the Consumer Price Index – where lessor claims unpaid outgoings despite departure from outgoings regime under the lease – whether conventional estoppel or estoppel by representation precludes lessor from claiming the actual rent owed under the lease – whether departure from outgoings regime under the lease defeats claim for unpaid outgoings

Legislation Cited:
A New Tax System (Goods and Services Tax) Act 1999 (Cth), ss 9-70, 9-75
Limitation Act 1969 (NSW), s 14

Cases Cited:
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
GR Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80
Moratic Pty Ltd v Gordon (2007) NSW ConvR 56-172; [2007] NSWSC 5
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37
Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65
United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904

Category: Principal judgment
Parties: Shimden Pty Ltd (Plaintiff/Cross-Defendant)
Park Pty Ltd (Defendant/Cross-Claimant)
Representation:
Counsel:
Mr F C Corsaro SC and Mr F F F Salama (Plaintiff/Cross-Defendant)
Mr P T Newton SC (Defendant/Cross-Claimant)
Solicitors:
Memcorp Lawyers (Plaintiff/Cross-Defendant)
Stanton and Stanton Lawyers (Defendant/Cross-Claimant)

File Number(s): 2019/229337
Publication restriction: None

Judgment

Introduction

These proceedings concern a dispute between the plaintiff landlord (“Shimden”) and the defendant tenant (“Park”) in respect of a lease of a service station and convenience store in Rawson Road, Granville. The lease was for a term commencing on 1 December 2008 and terminating on 30 November 2014. The lease contained an option to renew for a further term of 7 years. The option was sought to be exercised in 2014, but no new lease was ever executed. In any event, the tenancy between Shimden and Park came to an end in August 2019 when Shimden sold the premises.
In brief, Shimden seeks to recover amounts of rent and outgoings it claims are payable to it pursuant to the terms of the lease. Park resists the claims on various grounds, including that on the proper construction of the lease the claimed amounts are not payable, or because the claims are precluded by either an estoppel by convention or an estoppel by representation. Park also raises a defence under s 14 of the Limitation Act 1969 (NSW) in respect of…

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: [2022] NSWSC 267
Decision Date: 15 March 2022

CaseChat Overview and Summary

The dispute between Shimden Pty Ltd, the lessee, and Park Pty Ltd, the lessor, centred on the interpretation and enforcement of a commercial lease. The lessor argued that the lessee had failed to pay certain components of the rent and outgoings as stipulated in the lease. This led to a court case where the primary legal issue was whether the rent specified in the lease included or excluded GST, and if the lessor was entitled to claim unpaid rent components due to erroneous invoices and the failure to adjust for changes in the Consumer Price Index. Additionally, the lessor sought to recover unpaid outgoings despite having abandoned the formal outgoings regime under the lease. The court was also tasked with determining whether conventional or representational estoppel precluded the lessor from claiming the actual rent owed under the lease, and whether the lessor's departure from the outgoings regime defeated its claim for unpaid outgoings.

The court examined the lease terms meticulously to ascertain the intended meaning of the rent amount, focusing on whether it was inclusive or exclusive of GST. It concluded that the lease's wording did not explicitly state whether GST was included, but rather, the context and surrounding circumstances indicated that the rent was exclusive of GST. The court also ruled that the lessor's claim for unpaid rent components due to erroneous invoices and the failure to adjust for CPI changes was not supported by the lease terms. Regarding the outgoings, the court held that the lessor's departure from the formal outgoings regime under the lease meant it could not recover unpaid outgoings. The court further found that neither conventional nor representational estoppel applied to preclude the lessor from claiming the actual rent owed under the lease.

The court ultimately determined that the lessor was not entitled to the unpaid components of rent and outgoings as claimed. The court did not find any estoppel principles applicable to prevent the lessor from claiming the actual rent owed under the lease. Given the clear terms of the lease and the lessor's departure from the outgoings regime, the court dismissed the lessor's claims. Consequently, the court ordered that the lessor take nothing by way of its claims and that the lessee pay the costs of the proceeding.

Orders