Spuds Surf Chatswood Pty Ltd v PT Ltd (RLD)

Spuds Surf Chatswood Pty Ltd (Appellant) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales (Primary Judge). The Appellant sought damages for alleged breaches of covenants in a retail lease, including an obstruction of sight-lines and access to its shop, and claimed the Respondent had engaged in unconscionable conduct. The Primary Judge found the lease was incompletely executed and did not bind the parties, but nevertheless found the Respondent had engaged in unconscionable conduct and awarded damages to the Appellant. The Respondent cross-appealed the amount of damages awarded.

The primary legal issues for the Court of Appeal were whether the lease was incompletely executed, whether the Respondent had engaged in unconscionable conduct, and if so, whether such conduct caused loss to the Appellant, and if so, what the amount of that loss was. The Appellant contended that the lease was not incompletely executed and that the Primary Judge should have found it was binding. The Respondent argued that the lease was incompletely executed and that the Primary Judge erred in finding unconscionable conduct and awarding damages.

The Court of Appeal held that the lease was incompletely executed and did not bind the parties. However, the appeal was allowed to extend to the merits on the question of unconscionable conduct, and a further hearing was ordered to determine whether the Respondent's conduct amounted to unconscionable conduct and, if so, what the amount of damages was. The Court of Appeal held that the Primary Judge erred in finding the lease was binding, but that the appeal should extend to the merits on the question of unconscionable conduct, and that a further hearing should be held to determine the amount of damages, if any, to which the Appellant was entitled.