South Sydney Council v Royal Botanic Gardens

South Sydney Council (the Council) and the Royal Botanic Gardens & Domain Trust (the Trust) were parties to a dispute concerning the interpretation of a lease agreement. The core of the disagreement lay in how the rent payable under the lease was to be determined, specifically whether the matters listed in a particular clause were exhaustive or merely illustrative of factors the Council could consider. The matter came before the Court of Appeal of New South Wales.

The central legal issues before the court were twofold. Firstly, the court was required to determine the proper construction of clause 4(b) of the lease, which stipulated that the Council "may have regard to" certain specified matters when determining the rent. The question was whether this language meant that only those specified matters could be taken into account, or if the Council retained a broader discretion to consider other relevant factors. Secondly, the court considered whether, in light of the dispute over rent determination, rectification of the lease or specific performance of its terms was an appropriate remedy.

The Court of Appeal held that the phrase "may have regard to" indicated that the matters listed in clause 4(b) were not exhaustive. The court reasoned that such phrasing typically signifies a non-restrictive list, allowing for the consideration of other relevant factors in addition to those enumerated. The court further found that the dispute over the rent determination did not warrant rectification of the lease, as there was no evidence of a common mistake or a unilateral mistake coupled with unconscionable conduct. Consequently, specific performance of the lease terms, as they stood, was not precluded by the ambiguity or the parties' differing interpretations of the rent review clause.