Steel & Stuff Pty Ltd v Fallon Street Properties Pty Ltd

Steel & Stuff Pty Ltd sought a declaration and damages from Fallon Street Properties Pty Ltd for alleged breaches of a lease agreement concerning a property at 175 Pacific Highway, North Sydney. The central issue was whether an oral agreement existed, whereby the tenant would pay only half the stipulated rent until the landlord completed building work on the premises. The court had to determine if such an agreement was binding and if the landlord's failure to complete the building work constituted a breach of an implied term of the lease.

The court considered whether the alleged oral agreement was sufficiently established and if it could be enforced. The tenants argued that the landlord promised to complete the building work within a certain timeframe and that the rent would be reduced until that work was finished. The landlord denied making such a promise, asserting that the full rent was payable regardless of the state of the premises. The court examined the evidence and testimony to determine if the oral agreement was credible and if it could be enforced as part of the lease terms. The court also assessed whether the landlord's failure to complete the building work within the alleged timeframe amounted to a breach of an implied term of the lease.

The court found that the evidence supported the existence of an oral agreement whereby the tenant would pay half the stipulated rent until the landlord completed the building work. The court held that this agreement was binding and enforceable as it was consistent with the terms of the written lease and the surrounding circumstances. The court further found that the landlord's failure to complete the building work within the agreed timeframe constituted a breach of the implied term to use reasonable endeavours to complete the work. The court awarded the tenants a declaration that the landlord breached the lease and ordered the landlord to pay the tenants damages for the breach.

The court ordered Fallon Street Properties Pty Ltd to pay Steel & Stuff Pty Ltd damages for the breach of the lease agreement, including the unpaid rent and any other relevant costs. The court also granted a declaration that the landlord breached the lease by failing to complete the building work within the agreed timeframe. The tenants were awarded their costs of the proceeding.