Stonewall Hotel Pty Ltd v Papantoniou - [2017] NSWSC 964

Supreme Court

New South Wales

Medium Neutral Citation: Stonewall Hotel Pty Ltd v Papantoniou [2017] NSWSC 964
Hearing dates: 5 – 6 July 2017
Date of orders: 20 July 2017
Decision date: 20 July 2017
Jurisdiction: Equity
Before: Darke J
Decision:
Declarations and orders to be made to the effect that the plaintiff validly exercised two options to renew a lease.

Catchwords: LEASES AND TENANCIES – options to renew lease – validity of exercise of options – where tenant served notice of exercise of option on solicitor who had acted for lessors – whether solicitor had authority to receive notice on behalf of all lessors – where tenant served second notice of exercise of option by email – whether provisions of lease incorporating Conveyancing Act 1919 (NSW), s 170 are facultative or mandatory – options validly exercised
Legislation Cited: Conveyancing Act 1919 (NSW), s 170
Cases Cited: Bressan v Squires [1974] 2 NSWLR 460
Comdox No 24 Pty Ltd v Robins [2009] NSWSC 367
Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
Express Clearances Pty Ltd v The Austral Brick Company Pty Ltd (2007) 13 BPR 24,271; [2007] NSWSC 213
FAI General Insurance Company Ltd (in liquidation) v Parras (2002) 55 NSWLR 498; [2002] NSWCA 334
Jones v Dunkel (1959) 101 CLR 298
Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd (1998) 9 BPR 16,361
Mineaplenty Pty Ltd v Trek 31 Pty Ltd (2006) 17 BPR 32,645; [2006] NSWSC 1203
Nguyen v Taylor (1992) 27 NSWLR 48
Young v Lamb (2001) 10 BPR 18,553; [2001] NSWCA 225
Category: Principal judgment
Parties: Stonewall Hotel Pty Ltd (Plaintiff)
John Papantoniou (First Defendant)
Aristotelis Papantoniou (Second Defendant)
Stella Papantoniou (Third Defendant)
Efthemia Papantoniou (Fourth Defendant)
Representation:
Counsel:
Mr G R Waugh (Plaintiff)
Mr J R B Pearson (First and Third Defendants)
Mr M W Sneddon (Second and Fourth Defendants)
Solicitors:
Matthews Solicitors (Plaintiff)
Papantoniou Blake Lawyers (First and Third Defendants)
Nicholas Angelos & Co (Second and Fourth Defendants)

File Number(s): 2016/386074
Publication restriction: None

Judgment

Introduction

The plaintiff is the lessee under registered lease AC807481 over the ground floor of 177 Oxford Street, Darlinghurst. The plaintiff became the lessee pursuant to a transfer dated 20 March 2007. At the time of the transfer, the lease was varied so as to provide for four options to renew the lease, which was for a term of 5 years from 4 November 2005 to 3 November 2010. These proceedings concern the validity of the plaintiff’s attempts to exercise the first and second of the options to renew in 2010 and 2015 respectively.
The defendants are the registered proprietors of the premises. The first and second defendants, the brothers John and Aristotelis Papantoniou, were the lessors when the lease was initially granted in 2005. By transfers effected in June 2007, John Papantoniou transferred his interest in the premises to himself and his wife Stella Papantoniou (the third defendant), and Aristotelis Papantoniou transferred his interest in…

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: [2017] NSWSC 964
Decision Date: 20 July 2017

CaseChat Overview and Summary

In this case, the lessors, Stonewall Hotel Pty Ltd, brought an action against the lessees, Papantoniou, to determine the validity of their exercise of options to renew a lease. The dispute came before the Supreme Court of New South Wales. The primary issues the court had to address were whether the notice of exercise of the option was validly served and whether the relevant provisions of the lease were mandatory or facultative. The lessors argued that the options were not validly exercised because the notice was served on a solicitor who did not have authority to accept it on behalf of all lessors, and the provisions of the lease incorporating s 170 of the Conveyancing Act 1919 (NSW) were mandatory.

The court found that the notice of exercise of the option was validly served because the solicitor had acted for all lessors and the tenant reasonably believed that the solicitor was authorised to accept the notice on their behalf. Additionally, the court determined that the relevant provisions of the lease were facultative, not mandatory, and therefore the second notice of exercise of the option served by email was valid. Consequently, the court held that the options were validly exercised, and the lease renewal was confirmed.

The court's decision was based on a thorough analysis of the circumstances in which the notice of exercise of the option was served and the nature of the provisions of the lease. The court found that the lessors had not discharged the onus of proving that the notice was invalid. Furthermore, the court held that the incorporation of s 170 of the Conveyancing Act 1919 (NSW) in the lease did not render the provisions mandatory but rather indicated a preference for the specified method of communication. The court's decision resulted in the confirmation of the lease renewal, and the lessees' options to renew were upheld.

Orders