Tamsco Ltd v Franklins Ltd - [2001] NSWSC 1205

Reported Decision:
(2002) NSW ConvR 56-018

New South Wales

Supreme Court

CITATION: Tamsco Ltd v Franklins Ltd [2001] NSWSC 1205

CURRENT JURISDICTION: Equity Division
Commercial List

FILE NUMBER(S): SC 50178/01

HEARING DATE(S): 13/12/01

JUDGMENT DATE:
14 December 2001

PARTIES :

Tamsco Limited (P1)
Metcash Trading Limited (P2)
IGA Distribution Pty Limited (P3)
Franklins Limited (D1)
Franklins Management Services Pty Limited (D2)
Sanwick Pty Limited (D3)

JUDGMENT OF: Young CJ in Eq

COUNSEL : D Williams and I Griscti (P)
D Studdy (D1 & 2)
P O'Loughlin (D3)

SOLICITORS: Ebsworth & Ebsworth (P)
Gilbert & Tobin (D1 & 2)
Colin Daley Quinn (D3)

CATCHWORDS: LANDLORD & TENANT [43]- Covenant not to assign without consent- Effect of lease stating matters of concern on assignment- Whether application for consent must be full and detailed- Relevance of collateral motive of landlord- Shopping centre lease. PROCEDURE [744]- Declarations- Standing of proposed assignee of lease for declaration that consent to assignment unreasonably withheld- Whether declaration of utility.

CASES CITED: Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 139 ALR 663
Barrow v Isaacs & Son [1891] 1 QB 417
Bates v Donaldson [1896] 2 QB 241
Bromley Park Garden Estate Ltd v Moss [1982] 1 WLR 1019
Chalcedony Investments Pty Ltd v Faroud No 9 Pty Ltd (1988) ANZ Conv R 431
Chow v Registrar General (Young J, 24 June 1998)
Dufaur v Kenealy (1908) 28 NZLR 269
Eastern Telegraph Co Ltd v Dent [1899] 1 QB 835
Haberecht v Chapman (1993 ANZ Conv R 277
International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513
Johnco Nominees Pty Ltd v Albury-Wodonga (NSW) Corp [1977] 1 NSWLR 43
Lewis & Allenby (1909) Ltd v Pegge [1914] 1 Ch 782
McMahon v Docker (1945) 62 WN (NSW) 155
Noyes v Klein (1984) 3 BPR 9216
Secured Income Real Estate (Australia) Ltd v St Martins Investment Pty Ltd (1979) 144 CLR 596

DECISION: Orders made.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

50178/01

YOUNG CJ in EQ

FRIDAY 14 DECEMBER 2001

TAMSCO LTD v FRANKLINS LTD

JUDGMENT

: These proceedings concern the lease over the Franklins store at the Riverwood Plaza Shopping Centre. The proceedings were commenced on 5 December 2001 and were listed yesterday for interlocutory hearing, or else final hearing, if that could be arranged.

2 This was rather a generous order as the documents show that any right the plaintiffs had had crystallised by mid October. However, I reluctantly agreed to save the day that had been set aside to hear as a final matter whether the declaration sought in para 7 of the summons, or a more precise form of that, should be made. I did so on the basis that no-one objected and that I was assured that we could finish it in a day. The case proceeded from 10am to 4.30 pm yesterday. I spent some hours last night and this morning considering the judgment, which will take me the best part 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: [2001] NSWSC 1205
Decision Date: 14 December 2001

CaseChat Overview and Summary

The case of Tamsco Ltd v Franklins Ltd involved a dispute between a tenant, Tamsco Ltd, and a landlord, Franklins Ltd, over the assignment of a lease for a shopping centre. Tamsco sought to assign the lease to another party, but Franklins withheld its consent. Tamsco applied for a declaration that Franklins' refusal to consent was unreasonable and sought an order compelling Franklins to provide consent. The case was heard in the Federal Court of Australia.

The central legal issue in the case was whether the landlord was required to provide detailed reasons for withholding consent to an assignment of a lease. The lease contained a covenant that the tenant could not assign without the landlord's consent, but it did not specify the grounds on which the landlord's consent could be refused. The court had to determine whether the landlord's refusal to consent was unreasonable and whether the landlord's collateral motives were relevant to the decision.

The court held that the landlord was not required to provide detailed reasons for withholding consent to an assignment of a lease, as long as the landlord's decision was not capricious or arbitrary. The court found that the landlord's decision to withhold consent was not unreasonable, as it was based on a genuine belief that the proposed assignee was not suitable for the shopping centre. The court also held that the landlord's collateral motives were not relevant to the decision, as long as the landlord's decision was not influenced by an improper purpose.

The court found in favour of Franklins Ltd and dismissed Tamsco's application for a declaration that the consent to assignment was unreasonably withheld. The court held that the landlord's decision to withhold consent was not capricious or arbitrary, and that the landlord was not required to provide detailed reasons for its decision. The court also held that the landlord's collateral motives were not relevant to the decision, as long as the landlord's decision was not influenced by an improper purpose. The court's decision provides guidance on the requirements for withholding consent to an assignment of a lease in the context of a shopping centre.

Orders