Tasmanian Ports Corporation Pty Ltd v Resources Australasia Pty Ltd
[2024] TASSC 60
•11 November 2024
[2024] TASSC 60
| COURT: | SUPREME COURT OF TASMANIA |
| CITATION: | Tasmanian Ports Corporation Pty Ltd v Resources Australasia Pty Ltd |
| [2024] TASSC 60 | |
| PARTIES: | TASMANIAN PORTS CORPORATION PTY LTD |
| v | |
| RESOURCES AUSTRALASIA PTY LTD as trustee for | |
| the Resources Australasia Unit Trust | |
| FILE NO: | 1668/2021 |
| DELIVERED ON: | 11 November 2024 |
| DELIVERED AT: | Hobart |
| HEARING DATES: | 2-6 September 2024 |
| JUDGMENT OF: | Blow CJ |
| CATCHWORDS: |
Landlord and Tenant – Termination of the tenancy – Provisions giving right to terminate in named circumstances – Other cases – Breach of terms requiring tenant to seek landlord's consent and obtain approval in writing before commencement of works – Breach of terms requiring tenant to comply with relevant laws and obtain required permits – Erection of structure without permission of landlord or council building permit.
Aust Dig Landlord and Tenant [173]
Cases cited:
Adelaide Leaseholds Inc v Oxford Properties Canada Limited (1993) 44 ACWS (3d) 359
APF Properties Pty Ltd v Robinson Investment Capital Pty Ltd [2013] TASSC 59
Beamer Pty Ltd v Star Lodge Supported Residential Services Pty Ltd [2005] VSC 236
Greek Macedonian Club Limited v Pan Macedonian Greek Brotherhood NSW Limited [2007] NSWSC 92
Leads Plus Pty Ltd v Kowho Intercontinental Pty Ltd [2000] NSWSC 459, 10 BPR 18,085
Legione v Hateley (1983) 152 CLR 406
Samuel Properties (Developments) Limited v Hayek [1972] 1 WLR 1296
Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 54, 217 CLR 315
Wilson v Kelly [1957] VR 147
REPRESENTATION:
Counsel:
Plaintiff: A Walker Defendant: A Schlicht
Solicitors:
Plaintiff: Minter Ellison Defendant: Hiways Lawyers
| Judgment Number: | [2024] TASSC 60 |
| Number of paragraphs: | 104 |
Serial No 60/2024 File No 1668/2021
TASMANIAN PORTS CORPORATION PTY LTD v RESOURCES AUSTRALASIA
PTY LTD as trustee for the Resources Australasia Unit Trust
| REASONS FOR JUDGMENT | BLOW CJ 11 November 2024 |
1 This action relates to a dispute between a landlord and a tenant. The plaintiff company, Tasmanian Ports Corporation Pty Ltd, is the owner of land at the port of Bell Bay. The defendant company, Resources Australasia Pty Ltd, occupies part of that land where it carries on business as a manufacturer of wood pellets. Those pellets are made from small timber particles that were referred to during the trial of the action as sawdust and as fines.
2 On 11 March 2020 the parties executed a lease which provided for the plaintiff to lease to the defendant 7950 square metres of its land for use as a "Wood Pellet and Briquette Manufacturing Plant" and associated uses. The premises were leased for a term of five years commencing on 1 March 2019 and ending on 29 February 2024 at a rent of $85,000 per annum plus GST, with annual rent adjustments and an option for renewal for one further term of five years. The plaintiff's principal contention is that the defendant breached the lease by erecting a structure without its permission and without a building permit.
3 The parties also executed a deed that was referred to as an "Incentive Deed". It was also dated 11 March 2020. It provided for the rent payments payable by the defendant to the plaintiff to be reduced by a total of $90,500 plus GST over the first four years of the term of the lease. It appears that that arrangement was negotiated as a result of the defendant incurring substantial expenditure in upgrading the power supply to the premises. Clause 4.1(b) of that deed made the rent reduction conditional upon the defendant performing and observing its obligations under the lease. The defendant paid rent at the reduced rates, but the plaintiff now contends that it breached terms of the lease, and that it is liable to pay the difference between the full rental and the reduced rental in respect of the period that the lease was in force.
4 The defendant's pleadings did not contain an explicit admission that the defendant was contractually bound by the terms of the lease. However the Incentive Deed began with a recital reading, "The parties have entered into the Lease." In clause 1.1 of the Incentive Deed, "Lease" was defined to mean "the lease dated on or about the date of this document made between the Landlord and the Tenant …". By virtue of the recital in the Incentive Deed, the defendant is estopped from denying that the parties had entered into the lease. In any event, the defendant relies on the lease as a contractually binding instrument in its pleadings.
5 The plaintiff's principal claims in these proceedings are for the following:
• An order requiring the defendant to deliver up possession of the leased premises to it. •
Damages in the nature of mesne profits in respect of the defendant's occupation of the leased land from the termination or expiry of the lease until that land is vacated by the defendant.
•
The sum of $68,906.85 in respect of rent, on the basis that the defendant lost the benefit of the Incentive Deed.
•
Damages for trespass, on the basis that the defendant used land of the plaintiff outside the boundaries of the leased premises to store materials without the permission of the plaintiff.
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• An injunction restraining the defendant from storing materials on any part of its property. 6 Mesne profits are in substance damages for trespass, claimable from the time when a defendant ceases to hold land as a tenant and becomes a trespasser: Wilson v Kelly [1957] VR 147 at 152. Since the defendant has not vacated the premises, both parties wish any assessments in relation to the plaintiff's claims for mesne profits and/or other money claims to be deferred. If I conclude that judgment should be entered for the recovery of any money, the appropriate course is for me to make an interlocutory order for payment of a sum or sums to be assessed.
7 In respect of its claim for damages for trespass on land adjacent to the leased land, the plaintiff is not making any claim in respect of the period after 30 June 2022.
8 Other relief sought by the plaintiff in its amended statement of claim includes declarations as to the termination of the lease.
9 It is common ground that the defendant has continued to occupy the leased premises at all
material times.
10 The plaintiff contends that the lease is no longer in force, on three bases:
• It contends that it terminated the lease on 19 March 2021 with effect from that date pursuant to clause 42 of the lease, which gave it the right to do so in the event of the defendant breaching any essential term of the lease. At that time the plaintiff asserted that the defendant had breached essential terms of the lease in several respects. At trial it relied principally on a contention that the defendant had breached an essential term by erecting a structure that was referred to as an awning without its permission and without building approval from the George Town Council ("the council"). • Alternatively, it contends that it terminated the lease with effect from 23 February 2022 by giving the defendant 12 months' notice of the termination by a letter dated 23 February 2021. Under clause 41 of the lease it had the right to terminate the lease at any time without cause on giving the defendant 12 months' notice. • Alternatively, it contends that the lease expired on 29 February 2024 and that the defendant has not exercised its option to renew the lease. 11 The lease provided for the option for renewal to be exercisable between 1 September 2023 and 30 November 2023. It is common ground that the defendant did not give the plaintiff written notice of its exercise of the option to renew between those dates or at all.
12 The defendant's principal contentions can be summarised as follows:
• It contends that the awning was constructed with the knowledge of the plaintiff's management. •
It contends that the plaintiff is or should be precluded from obtaining any relief in respect of the awning having been constructed without the plaintiff's written permission or the approval of the council because retrospective building approval was granted by the council in 2022 with the written consent of the plaintiff.
•
It contends that it would be unconscionable for the plaintiff to rely upon the termination of the lease by the letter dated 23 February 2021, the termination of the lease on 19 March 2021, or the expiry of the lease without the option to renew having been exercised. It relies on ss 21 and 237(1) of the Australian Consumer Law.
• It contends that all breaches of the lease have been "rectified". 3 No 60/2024
• In relation to the plaintiff's claim for the difference between the full rent payable under the lease and the reduced rent payable pursuant to the Incentive Deed, it contends that there were no relevant breaches of the lease; that the plaintiff has waived its right to rely on any such breaches; that the plaintiff is estopped from asserting that there were any such breaches; and that it is unconscionable for the plaintiff to assert its rights under the Incentive Deed. • It contends that it should be granted relief against forfeiture. • It contends that it ought to be allowed to exercise its option to renew the lease after the expiry of the time limit for doing so. • It contends that there is no basis for the granting of the injunction sought by the plaintiff. 13 The defendant does not deny that it used land of the plaintiff outside of the leased area for the storage of materials. There is a dispute as to whether it had the plaintiff's permission to do so, how much of the plaintiff's other land was used, and when.
The awning
14 At all material times the chief executive officer of the defendant company was Mr Shayne Murphy. He negotiated with the management of the plaintiff company to lease the land in question and for the setting up of a wood pellet manufacturing plant on the premises. The premises included a disused shed, referred to as Shed A. Machinery was set up inside that shed. Other machinery was set up outside that shed. According to plans eventually submitted to the council, the machinery outside the shed was sawdust loading machinery. The wood pellets were manufactured from sawdust. Mr Murphy made arrangements for the construction of a roof over the machinery outside Shed A. A structure was built during 2020. It was like an open-sided shed. It consisted of a roof supported by steel posts. It measures about 24 metres x 43 metres. That is the structure known as the "awning".
15 Counsel for the defendant asserted in his opening and closing speeches that the construction of the awning commenced in February 2020, but no evidence to that effect was adduced. An aerial photograph taken on 8 April 2020 shows that the awning did not exist at that time. It must have been constructed after the execution of the lease on 11 March 2020.
16 There is uncontradicted evidence that the management of the plaintiff company were not aware of the construction of the awning until 28 July 2020. On that day one of the plaintiff's employees, Mr Moore, visited the site, saw the awning, took a photo of it, and emailed the photo to the plaintiff's manager of commercial leasing, Mr Sully. It is common ground that the defendant company had constructed the awning without seeking or obtaining the written permission of the plaintiff; that its construction required a building permit from the council under the Building Act 2016; and that no such permit had been obtained before its construction was completed.
17 The defendant's lease of the premises contained terms to the following effect:
•
Clause 22 required the defendant to "comply with all relevant laws, regulations by-laws, guidelines, standards, codes, orders and other binding instruments (Law) that are applicable to the use of the Premises".
•
Clause 24 required the defendant to obtain all required approvals and permits. It read, "You have full responsibility to obtain at Your cost, all approvals, permits and licences required for Your use of the Premises."
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• Clause 31 provided, "You must seek the Lessor's consent prior to undertaking any works (including any fencing, alterations, additions, fixtures, partitions or fittings) around or to the Premises …". • Special condition F provided, "You must, at Your cost, observe and comply with all laws, compliance standards, by-laws and other requirements including those relating to: (i) Your use and occupation of the Premises for the Permitted Use; (ii) the fixtures, fittings, machinery, plant and equipment in the Premises; (iii) works carried out on the Premises; and (iv) the Building Act and Building Regulations." • Special condition I included the following: "You are required to obtain, at Your cost, all approvals, permits and licences required for You to conduct the Permitted Use at Premises. … Any such works described in this Special Condition I must be approved by the Lessor in writing before the commencement of any works at the Premises." • Clause 42 provided, "In the event that Your conduct (whether an act or an omission) constitutes … a repudiation or breach of any Essential Term, You acknowledge and agree that the Lessor may, subject to compliance with Chapter 5 of the Corporations Act, immediately … revoke your right to occupy the Premises …". • In Schedule 1, "Essential Term" was defined to include clauses 22, 24, and 31 and Special Conditions F and I. • Clause 41 provided, "You agree that the Lessor may terminate this lease at any time upon giving You 12 months' written notice. No liability will arise for any damages or compensation arising out of any termination of this Lease in accordance with this clause." • Clause 43 provided, "In the event that either You or the Lessor (in either case, the Defaulting Party) breaches any other term of this Lease, the other party may require the Defaulting Party to rectify the breach within a period of 7 days (or such other period as agreed). If the Defaulting Party does not rectify the breach within that period, the other party may terminate this Lease immediately by notice in writing." 18 By constructing the awning without first seeking and obtaining the plaintiff's permission, the defendant committed breaches of clause 31 and Special Condition I. By constructing the awning without building approval from the council, the defendant committed breaches of clauses 22 and 24 and Special Conditions F and I. By failing to take steps to obtain building approval, the defendant was committing continuing breaches of those provisions.
19 On 13 August 2020 Mr Sully wrote to the defendant. His letter included the following:
"It has recently been brought to our attention that You have constructed a large awning structure on the leased premises without providing any prior notice to TasPorts or seeking TasPorts' consent to the construction of the structure.
This constitutes a breach of a number of essential terms of the Lease, more particularly clauses 24, 25, 31, 43 and Item 20 (subclauses F & I). Any alteration to, or construction of, a new addition or structure, requires You as lessee to seek the prior written consent of TasPorts. In addition, You are required to obtain any relevant approvals and permits, and to meet any requirements imposed by any authority and ensure all works comply with the Building Act and Regulations.
TasPorts is of the belief that the size and scale of the new awning structure is likely to require multiple building approvals and permits, engineering certification and building certification. Please provide copies of any permits and approvals that are required for the awning structure to TasPorts within 7 days of the date of this letter.
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If You do not have the necessary permits and approvals issued by the relevant authorities, TasPorts requires You to retrospectively obtain all such permits and approvals, together with engineering certification, building certification and 'as constructed' building and services drawings, to ensure that the new awning structure is compliant with the relevant Building Act and Regulations and provide TasPorts with an update as to the progress of obtaining such permits/approvals and certification within 14 Days of the date of this letter.
Your failure to obtain TasPorts' prior written consent and to provide the necessary local authority permits and approvals to TasPorts for its review creates significant safety concerns and risk to TasPorts.
TasPorts would like to refer your attention to Clause 43.
TasPorts reserves its rights under the Lease."
20 Four weeks went by without any response from Mr Murphy. On 10 September 2020 Mr Sully sent him an email asking him to provide "an update on the status of the approvals required for the awning recently constructed on the demised lease area, and your proposed actions to address this matter".
21 Later that day Mr Murphy responded with an email to Mr Sully in the following terms:
"We engaged Luton [sic] Designs at the commencement of the design and building work, unfortunately Tony became unwell and throw in Covid and things didn’t progress as had been hoped.
Anyway he has completed the work and is dealing with the council to obtain the approvals.
Prior to that I had discussed the possibility of using a fabric shed with the council and had presented all of the drawings and specifications for that and they only required a building permit to be obtained.
We also provided the same information to Tasports.
You will recall when I discussed this with you before, we will comply with all of the building code requirements and then some in fact we made the footings more than twice the required size to make sure they would cope with the wind.
I am not sure what your purpose is in making threats but its starting to wear a bit thin and I'm starting to get a bit over it.
It's hard enough trying to develop a business in the current circumstances without having to deal with harassment over nonsense.
As soon as the approvals have been obtained I will forward a copy of them to
Tasports."
22 It was true that Mr Murphy had engaged a man named Tony Hewitt from a company named Louton Design Pty Ltd to prepare plans for the awning. Mr Hewitt had obtained a planning permit for the use of the premises described as "Manufacturing and Processing – Wood Pellet Mill". That permit was issued on 22 May 2019. However there is no evidence that he had taken any steps towards obtaining building approval for the awning.
| 23 | Mr Sully replied to Mr Murphy by email on 16 September 2020 as follows: "Hi Shayne, Thanks for the acknowledgement and update. |
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TasPorts recognises that it is challenging times for may businesses, however, managing risks across our portfolio to ensure the safety of our staff, occupants and the public remains a priority for TasPorts.
Unapproved activities or construction of buildings on TasPorts' land is of concern given the potential safety risks and hazards they may present to staff and clients entering the property or surrounding properties.
Accordingly, TasPorts requests that you comply with the terms of the lease such as obtaining TasPorts' consent prior to making any further modifications to the building or lease area.
I am pleased to hear that you have engaged Luton Design to assist with the approvals and permits, please keep Scott Norton (CC'd) and myself regularly updated on progress."
24 At about this time it came to the attention of the council that the awning had been constructed without approval. On 16 September 2020 an officer of the council, Tamara Burt, sent the plaintiff a building notice pursuant to s 237 of the Building Act requiring it within 28 days either to demolish the awning or to "make all necessary applications for a permit of substantial compliance and planning permits".
25 Mr Sully appears to have been unaware of the building notice when he sent Mr Murphy his email of the same date which I have set out at [23] above.
26 Mr Sully sent the building notice to Mr Murphy attached to an email on the afternoon of Friday 18 September 2020. His email read as follows:
"Further to our previous correspondence regarding this matter, please see attached the Building Notice Form 14 that we received from Council today via registered post for your attention and action.
Please note that this advice requires you to contact Council within 48 hours and we would ask that you ensure this is done by COB Monday.
As previously requested, please keep me updated on your progress with Council to address the matters identified."
27 On Monday 21 September 2020 Mr Murphy contacted Mr Hewitt of Louton Design. Mr Hewitt contacted Ms Burt and then provided Mr Murphy by email with a list of documents that would need to be submitted to the council in support of an application for building approval. His email read as follows:
"I have spoken to Tamara at Council and confirmed her requirements.
We will need to submit a1 site plan (available tomorrow 22/9 pm) along with a set of drawings as supplied by Metal corp.
2 A form 55 or 25 from Metal corp. (structural certification of the design)
3 A Form 25 for the site layout (Louton Design) and if necessary a Form 25 for the shed structure.
This documentation will need submission to Tas Ports for approval as the Property
Owner.
Ultimately it will require submission to Council for Approval.
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I will go over the requirements and make a package available to you 22/9 pm."
28 On 22 September 2020 Mr Hewitt sent the documentation by email to Mr Sully, with a copy to Mr Murphy. His email to Mr Sully read as follows:
"Please find attached documentation in support of the Eco Pellet plant located at 212 Norfolk Street Bell Bay. This documentation should be suitable for the needs of George Town Council.
You will need to make your submissions to George Town Council.
Should you require additional info please contact me."
29 The documentation assembled and sent to Mr Sully and Mr Murphy by Mr Hewitt did not include a form of application for building approval. By virtue of s 139 of the Building Act, such an application needed to be made either by the plaintiff as the "owner" of the premises, or by a person authorised in writing by "the owner" to make the application. Section 139 reads as follows:
"139 Application for building permit
(1) An owner of premises, or a person authorised in writing by an owner of premises, may apply for a building permit to perform permit building work, or a stage of permit building work, in respect of those premises.
(2) An application under subsection (1) –
(a) must be made to the relevant permit authority; and
(b) must be accompanied by –
(i) a certificate of likely compliance (permit building work) that is in
force in respect of the proposed permit building work; and
(ii) the building administration fee payable in respect of the proposed
permit building work; and
(iii) any other fee payable in respect of the application; and
(c) is to include, or be accompanied by, such information and documentation
as is determined by the Director of Building Control."
30 The certificate of likely compliance referred to in s 139(2)(b)(i) is something that has to be issued by the building surveyor engaged in respect of the building work: s 130.
31 Since the defendant had contractual obligations to obtain building approval, the appropriate course was for it to have applied for a building permit under s 139(1) after first obtaining authority in writing to do so from the plaintiff. The plaintiff certainly did not have a contractual obligation to apply for building approval. Counsel for the defendant made a submission to the effect that it was because of "radio silence" on the part of the plaintiff at this stage that building approval was not sought. However it was clearly the expectation of Mr Sully and his colleagues that the defendant would make the appropriate application to the council, facilitated by it, in accordance with the requirements of the lease. However Mr Murphy did nothing further about the need for building approval at this stage.
32 On 29 October 2020 Mr Sully sent an email to Mr Hewitt, with a copy to Mr Murphy. It read
as follows:
"Thank you for the information and update on your progress.
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For clarity, under the terms of the Lease, all Building Approvals and Permits are the responsibility of the Lessee, in this case Resources Australasia Pty Ltd.
TasPorts will provide necessary lessor consent to the application as required, however, I would ask that you continue to assist Shayne with his application to Council."
33 On 30 November 2020 Mr Murphy advised Ms Burt that he thought that Tony Hewitt was progressing the application for building approval. He wrote, "I will follow up with him and let you know."
34 Ten more weeks went by, apparently without any further action in relation to the obtaining of building approval from the council on the part of either the plaintiff or the defendant. On 10 February 2021 Mr Sully sent an email to two council officers, Tamara Burt and Rex Cassidy. He enquired whether the council had received any applications from the defendant in respect of building approval or a change in the permitted use of the site to permit a Class 8 building instead of a Class 7 building. On 11 February 2021 Ms Burt replied that she had not heard anything since November of the previous year.
35 Later that day the council issued a building order under s 246 of the Building Act addressed to the plaintiff and to "EcoPellets Tasmania" (apparently a business name of the defendant company). That order required the recipients within 28 days to comply with the instructions given in the building notice dated 16 September 2020. It was stated that failure to comply would result in the issuing of an infringement notice and other actions in accordance with the Building Act.
36 Mr Murphy responded on the same day with an email to Ms Burt. It read as follows:
"I do apologise for the delay but we faced a very serious financial situation as a result
of the Covid Pandemic.Two of our major investors suffered significant financial losses which led to our operating capital disappearing. We were on the edge of closure but we have been working to refinance the business and we are getting there but it will take a little more time yet. We will get all the compliance things done and I just ask for a little understanding at this time, we should get back on track in the next two weeks."
37 The attitude of the plaintiff's management towards Mr Murphy and his company changed at this point. His comments about threats, harassment and nonsense in his email of 10 September 2020 had probably not helped. He had erected the awning without seeking permission. Sawdust for his company's business was being stockpiled on a large area of the plaintiff's land adjacent to the leased area. For reasons stated below I am satisfied that that was being done without the plaintiff's permission. As counsel for the plaintiff put it in his closing speech, the building order was "a game- changer caused by the defendant's lack of action".
38 The plaintiff responded to the building order by serving on the defendant a notice under s 15(1) of the Conveyancing and Law of Property Act 1884. That subsection reads as follows:
"(1) A right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant or condition in the lease, shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice specifying the particular breach complained of and, if the breach is capable of remedy, requiring the lessee to remedy the breach, and in any case requiring the lessee to make compensation in money for the breach, and the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach."
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39 This notice was referred to as a "Default Notice". It took the form of a letter from Mr Sully to Mr Murphy requiring the defendant within a reasonable time to remedy various asserted breaches of the lease that were listed in an appendix, and to make compensation in money to the satisfaction of the plaintiff within a reasonable time. The letter required the defendant to remedy the breaches giving rise to the building order no later than 11 March 2021. The defendant did not contend that the period allowed was unreasonably short.
40 The appendix included details of various asserted breaches that were not relied upon at the trial. Relevantly it included the following:
"1 In breach of clauses 22, 24, 25, 31 and Special Conditions F, I and O of the Lease, You have undertaken works to the premises without TasPorts' consent, without complying with the Building Act 2016 (Tas) and Building Regulations 2016 (Tas) and without the necessary approvals, permits and licences, including: …
(f) the construction of the awning which is the subject of the Building Notice (Form 14) dated 16 September 2020 from the George Town Council (Council) (Building Notice) and the Building Order (Form 15) dated 11 February 2021 from the Council requiring TasPorts to comply with the instructions given in the Building Notice within 28 days (Building Order). 2 In breach of clauses 22, 24, and 25 and Special Conditions F and I of the Lease, You are using the premises otherwise than in accordance with the terms of the Occupancy Permit and the requirements of Council to apply for a change of use and relevant permits."
41 Later that day the plaintiff served the defendant with the notice under clause 41 of the lease giving 12 months' notice of the termination of its tenancy.
42 On 26 February 2021 Mr Murphy emailed to Ms Burt the plans and other documentation that Mr Hewitt had sent to Mr Sully on 29 October 2020, together with a form signed by him on that day requesting the George Town Council building surveyor to provide building surveying services in respect of the "shed roof construction". Later that day Ms Burt sent an email to Mr Sully stating that Mr Murphy had provided "all the required documents and plans" and advising that the forms needed to be signed by the plaintiff as well. Those forms were not signed on behalf of the plaintiff until the following year.
43 The Building Act contains provisions as to what is required when building work has been carried out without compliance with that Act and has become the subject of a building order. Under s 255, the owner of the premises may apply to a building surveyor for a "certificate of substantial compliance" in respect of the work. The owner may then apply under s 258(1) for a "permit of substantial compliance" in respect of the work. By virtue of s 258(2)(a), that second application must be accompanied by a certificate of substantial compliance that is in force in respect of the work. The materials sent by Ms Burt to Mr Sully did not include applications under s 263 or s 258. To discharge its contractual obligations and obtain a building permit, the defendant needed to get the plaintiff to sign applications under those sections and needed to get them lodged with the council. It appears that nothing at all was done in relation to any such applications by anybody during 2021.
44 In its pleadings, the defendant has made a number of points in relation to the building order and the building notice. First of all, it has pleaded that the building notice was addressed to the plaintiff, not the defendant, and that it was therefore not binding on the defendant. That is true. But that made no difference to the defendant's contractual obligations to the plaintiff pursuant to the lease.
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Next, it was pleaded that although the building order was addressed to both the plaintiff and the defendant, it was not binding on the defendant because the defendant had not been served with a building notice. That is true too. But it is irrelevant since the issue of an order that was not binding on the defendant made no difference to the defendant's contractual obligations under the lease.
45 On 18 March 2021 Ms Burt sent an email to Mr Sully. She asked for "an update on where you guys are at with reviewing the plans and forms".
46 The following day, 19 March 2021, Mr Sully wrote to Mr Murphy giving notice of the immediate termination of the lease pursuant to clause 42. The grounds of the termination of the lease were set out in the following paragraph of the letter:
"However, as at the date of this letter, You have:
1 not responded to TasPorts in relation to the Default Notice;
2 not requested TasPorts' approval of the awning in accordance with the requirements of the Lease;
3 failed to take any steps to remedy the other Breaches of the Lease as set out in Appendix A to the Default Notice, in particular :
a You continue to operate outside of the leased premises and have in fact caused further raw materials delivered to and stored outside the premises since the Default Notice was served; and b You have taken no steps to obtain Council or TasPorts' approval of the other unlawful modifications to the premises referred to in Appendix A of the Default Notice."
47 On the same day Mr Sully sent an email to Ms Burt advising that the plaintiff had terminated the lease, and asking for an extension of time of 90 days for it to comply with the building order, anticipating that the premises would be vacated within 60 days. That extension was granted later that day.
48 The plaintiff made it clear to the defendant that it wanted the premises to be vacated. It threatened to institute court proceedings if they were not vacated. This action was instituted by the filing of a writ on 28 July 2021.
49 It is common ground that the council granted a planning permit for the awning under the Land Use Planning and Approvals Act 1993 on 5 May 2022. I have no evidence as to the events or circumstances relating to the granting of that permit. The plaintiff contends that such a permit was required, and that the defendant breached its contractual obligations under the lease by not applying for and obtaining such a permit. However I doubt whether the construction of the awning was a development so substantially different from the subject matter of the permit obtained by Mr Hewitt in May 2019 as to require a further permit. I need not decide whether the construction of the awning required a second permit because of the conclusions I have come to in relation to building approval, details of which appear below.
50 On 17 June 2022 Mr Moore, on behalf of the plaintiff, signed the application for building approval that Ms Burt had sent to his company in March 2021. I have very little evidence as to the circumstances in which the plaintiff decided to proceed with that application. The documentation was submitted to the council, and Ms Burt signed a building permit on 24 June 2022.
51 One of the exhibits tendered at the trial was a letter from the defendant's solicitors to the plaintiff's solicitors emailed on 16 November 2021. In that letter the defendant's solicitor explained
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what would need to be done for the council to grant a permit of substantial compliance under the Building Act. He went on to say, "This change to the permit process will necessitate changes to our client's counter-offer."
52 I have no evidence as to the terms of any offer by the plaintiff, nor as to the terms of any counter-offer or changed counter-offer by the defendant. It seems clear that negotiations were in progress, probably on a "without prejudice" basis, that those negotiations failed, and that the proceedings went to trial as a result. Apart from the solicitors' letter of 16 November 2021, I have no evidence as to the circumstances leading to the granting of the building permit in June 2022.
Relief against forfeiture of the lease
53 The defendant has pleaded that the plaintiff's conduct in relation to the relevant circumstances was unconscionable, and that there should be relief against forfeiture. The Court has jurisdiction to grant relief against the forfeiture of a lease both in its equitable jurisdiction and pursuant to s 15(2) of the Conveyancing and Law of Property Act. That subsection reads as follows:
"(2) Where a lessor is proceeding, by action or otherwise, to enforce such a right of re-entry or forfeiture, the lessee may, in the lessor's action, if any, or in any action brought by himself, apply to the Court for relief; and the Court may grant or refuse relief as the Court, having regard to the proceedings and conduct of the parties under the foregoing provisions of this section, and to all the other circumstances, thinks fit; and in case of relief may grant it on such terms, if any, as to costs, expenses, damages, compensation, penalty, or otherwise, including the granting of an injunction to restrain any like breach in the future, as the Court, in the circumstances of each case, thinks fit."
54 The equitable jurisdiction to relieve against forfeiture is invoked when there has been unconscionable conduct, particularly in association with fraud, mistake, accident or surprise: Legione v Hateley (1983) 152 CLR 406 at 447; Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 54, 217 CLR 315 at [36]-[37]. The test is whether resort by the landlord to the strict legal right of re-entry would be unconscionable: Leads Plus Pty Ltd v Kowho Intercontinental Pty Ltd [2000] NSWSC 459, 10 BPR 18,085; Beamer Pty Ltd v Star Lodge Supported Residential Services Pty Ltd [2005] VSC 236 at [442]. Unconscionability is also the test when relief against forfeiture is sought pursuant to s 15(2) or its equivalent in other jurisdictions: Greek Macedonian Club Limited v Pan Macedonian Greek Brotherhood NSW Limited [2007] NSWSC 92 at [73].
55 In order for relief against forfeiture to be granted, it needs to be established that there has been unconscionable conduct within the developed principles of the equity jurisdiction, rather than "unconscientious conduct in some loose sense where all principles are at large": Tanwar Enterprise Pty Ltd v Cauchi (above) at [20].
56 The question of unconscionability needs to be considered separately in relation to the notice terminating the lease for breach under clause 42, the giving of 12 months' notice of termination pursuant to clause 41, and the expiry of the lease without the exercise of the option to renew.
Termination for breach
57 The defendant contends that in all the circumstances the following conduct of the plaintiff makes it unconscionable for it to exercise its rights to recover possession of the premises pursuant to the notice of 19 March 2021:
• The plaintiff's knowledge of the construction of the awning. •
Mr Sully's promise in his email to Mr Hewitt of 29 October 2020, copied to Mr Murphy, when he said "TasPorts will provide necessary lessor consent to the application as required".
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• The plaintiff's failure to sign and return the forms that were sent to it by Ms Burt on 26 February 2021. • The signing and submitting of the Building Act documentation on 17 June 2022.
58 I am not persuaded that the plaintiff acted unreasonably in any respect in relation to the awning issue. The terms of the lease required the defendant not to carry out any works without the plaintiff's prior approval or consent, and to obtain any necessary approvals or permits. The construction of the awning constituted "permit building work" by virtue of s 128 of the Building Act. That section provides that all building work is permit building work, subject to certain exceptions. There is no evidence or suggestion that any such exception applies. Section 138(1) of the Building Act made it an offence to perform "permit building work" unless there was a valid building permit in force in respect of the building work. The need for such a permit was known to Mr Murphy. The defendant constructed the awning without seeking the plaintiff's permission or a building permit.
59 When it came to the attention of the plaintiff's management that the awning had been constructed, the plaintiff neither gave nor refused retrospective permission for its construction, but sent the letter of 13 August 2020 requiring the defendant to provide copies of any necessary permits and approvals. In that letter the defendant was asked to obtain retrospective permits and approvals if it did not already have them.
60 Thereafter the plaintiff was placed in the embarrassing position of becoming the recipient of a building notice under s 237 of the Building Act. It acted reasonably in expecting the defendant to obtain retrospective building approval since that was the defendant's obligation under the lease.
61 It was nearly six months after the letter of 13 August 2020, and more than four months after the service of the building notice, that the plaintiff discovered that no progress had been made in the obtaining of a retrospective permit. It was then placed in the more embarrassing position of becoming the recipient of a building order under s 246 of the Building Act. Under s 246(8), a body corporate that is served with a building order and does not comply with it is liable to a fine of up to 500 penalty units. The defendant's breaches of the lease had resulted in the plaintiff becoming liable to prosecution.
62 In the circumstances, it cannot be said that the plaintiff acted unconscionably in deciding to take steps to end the tenancy, despite the likely impact on the defendant's business. The first steps in that process were the s 15 notice and the 12-month notice of termination under clause 41, both served on 23 February 2021. That was nearly four months after Mr Sully had told Mr Hewitt that the plaintiff would provide "lessor consent". The defendant had not taken advantage of that promise within a reasonable time.
63 I am not persuaded that the Court should grant relief against forfeiture in its equitable jurisdiction or pursuant to s 15(2) in respect of the plaintiff's exercise of its rights to terminate for breach under clause 42 of the lease.
Termination without cause under clause 41
64 The question of relief against forfeiture in respect of the notice under clause 41 issued on 23 February 2021 can arise only if I am wrong in my conclusion as to relief against forfeiture in respect of the termination under clause 42.
65 In my view the plaintiff is in a stronger position in relation to the clause 41 notice than it is in relation to the clause 42 notice. Experienced business people had negotiated the terms of the lease, one of which entitled the plaintiff at any time to terminate the lease without cause on 12 months' notice. That is what it did. There was nothing inherently unconscionable about it exercising that right.
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Counsel for the defendant argued that it was unconscionable for it to rely on the clause 41 notice because, after it was served, the defendant was required to comply with the terms of the lease and had continued to occupy the land. That submission was totally without merit. Clearly during the 12-month notice period the defendant was contractually bound to comply with the terms of the lease. There was nothing unconscionable about the plaintiff requiring it to do so, or trying to get it to do so.
66 It follows that the defendant could not be entitled to relief against forfeiture in the Court's equitable jurisdiction or under s 15 in respect of the plaintiff's decision to insist upon its rights under clause 41 after the expiry of the notice on 23 February 2022.
Expiry of the lease
67 As I have said, the defendant did not give notice in writing to the plaintiff at any time exercising or purporting to exercise the option to renew the lease. Counsel for the defendant submitted that there would have been no point in doing so because the plaintiff would not have granted a new lease even though, in his submission, it was obliged to do so.
68 Neither counsel nor I have been able to find any case, reported or unreported, in which relief against forfeiture was granted, as an equitable remedy or as a statutory one, to a lessee who had not exercised on time an option to renew a lease.
69 For the purposes of this judgment I will assume, without deciding, that when an option to renew is not exercised within the required time the tenant does suffer a forfeiture against which equitable or statutory relief can be granted on the basis of unconscionable conduct. There is some support for that view: Samuel Properties (Developments) Limited v Hayek [1972] 1 WLR 1296 at 1302-1307; Leads Plus Pty Ltd v Kowho Intercontinental Pty Ltd (above) at [24]; Adelaide Leaseholds Inc v Oxford Properties Canada Limited (1993) 44 ACWS (3d) 359 (Ontario Court of Appeal).
70 The lease provided for the option to renew to be exercisable by the giving of written notice by the defendant during the period from 1 September 2023 to 30 November 2023 inclusive. As I have said, the lease was to expire on 29 February 2024. For the reasons stated above, I am satisfied that there was nothing unconscionable about the conduct of the plaintiff in relation to the ending of the lease prior to 1 September 2023. Since the defendant did not engage in any new form of conduct prejudicial to the defendant in relation to any possible right to occupy the premises on or after 1 September 2023, its conduct did not somehow become unconscionable at or about 29 February 2024.
Conclusion
71 For these reasons I reject all the defendant's contentions as to relief against forfeiture. However the Court has powers to grant relief on a different basis under the Australian Consumer Law.
Relief under the Australian Consumer Law
72 Section 21 of the Australian Consumer Law, which is in Chapter 2 thereof, provides as
follows:
"(1) [Unconscionable conduct prohibited] A person must not, in trade or commerce,
in connection with:
(a)
the supply or possible supply of goods or services to a person (other than a listed public company); or
(b)
the acquisition or possible acquisition of goods or services from a person (other than a listed public company);
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engage in conduct that is, in all the circumstances, unconscionable.
…
(3) [Determining whether conduct is unconscionable] For the purpose of
determining whether a person has contravened subsection (1):
(a)
the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and
(b)
the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.
(4) [Parliamentary intention] It is the intention of the Parliament that:
(a)
this section is not limited by the unwritten law relating to unconscionable conduct; and
(b)
this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and
(c)
in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract may include consideration of:
(i) the terms of the contract; and (ii)
the manner in which and the extent to which the contract is carried out;
and is not limited to consideration of the circumstances relating to formation of the
contract."
73 When unconscionable conduct occurs in contravention of s 21(1), relief is available pursuant to s 237 of the Australian Consumer Law. The relevant provisions of that section read as follows:
"(1) A court may:
(a) on application of a person (the injured person) who has suffered, or is likely to suffer, loss or damage because of the conduct of another person that: (i) was engaged in a contravention of a provision of Chapter 2, 3 or 4; or
…
make such order or orders as the court thinks appropriate against the person who
engaged in the conduct, or a person involved in that conduct.…
(2) The order must be an order that the court considers will:
(a) compensate the injured person, or any such injured persons, in whole or in part for the loss or damage; or (b) prevent or reduce the loss or damage suffered, or likely to be suffered, by the injured person or any such injured persons."
74 The defendant's arguments in reliance on these provisions are essentially the same as its arguments as to unconscionability in relation to relief against forfeiture. It is true that, because of s 21(4) the Court has a wider discretion to treat conduct as unconscionable than it has under the general law, and that it has a wider range of remedies available under s 237 than under the general law. However, for the reasons I have stated in relation to the arguments as to relief against forfeiture, I do not regard the plaintiff's conduct as unconscionable in any respect for the purposes of s 21.
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75 In arguing that it would be unconscionable for the plaintiff to take advantage of the defendant not having given notice exercising its option to renew the lease, counsel for the defendant relied on my judgment in APF Properties Pty Ltd v Robinson Investment Capital Pty Ltd [2013] TASSC 59. That case is authority for the proposition that it can be unconscionable within the meaning of s 21 for a landlord to refuse to renew a lease when a tenant has forgotten to exercise an option to renew. However the circumstances of that case were unique, and very different. A sale of a rural property had been unable to proceed to completion because subdivision approval could not be granted. Arrangements were made to circumvent the prohibition on subdivision by the granting of a lease of some land for nine years, with ten options for renewal for further terms of nine years each, with a view to the tenant occupying the area for 99 years. A rental equal to the value of the leased land was payable in respect of the first nine-year term. A rental of $1 per annum was payable in respect of the subsequent 90 years. The first nine-year lease expired without the tenant having exercised its option to renew. I held that it was unconscionable for the landlord to refuse to grant a new lease in those circumstances, and ordered it to do so as if the option had been validly exercised.
76 Obviously that case was very different from this one. Because of the defendant's breaches of the lease, the duration of those breaches, the exposure of the plaintiff to possible prosecution, and the right to terminate the lease on 12 months' notice without cause, the conduct of the plaintiff could not be regarded as unconscionable for the purposes of s 21.
Conclusion as to recovery of possession
77 For the reasons stated, I am satisfied that the lease was validly terminated for breach pursuant to clause 42 thereof on 19 March 2021. The plaintiff became entitled to recover possession of the premises that day. Since its conduct in relation to the termination of the lease and the recovery of possession has not been unconscionable, it is entitled to judgment for the recovery of the leased premises and mesne profits to be assessed.
The rent abatement issue
78 Clause 3.1 of the Incentive Deed provided as follows:
"3.1 Abatement of Rent The Tenant is entitled to an abatement of rent equal to the Incentive Amount so that each monthly instalment of Rent during the:
(a) Rent Free Period is reduced to nil; (b) second year of the Term commencing on 1 March 2020, is reduced by $2,000.00 (exclusive of GST) to $5,331.25 (exclusive of GST) per month; (c) third year of the Term commencing on 1 March 2021, is reduced by $1,500.00 (exclusive of GST) to $6,087.84 (exclusive of GST) per month; and (d) fourth year of the Term commencing on 1 March 2022, is reduced by $500.00 (exclusive of GST) to $7,353.42 (exclusive of GST) per month."
79 In Clause 1.1 of the Incentive Deed, "Incentive Amount" was defined to mean $90,500 exclusive of GST, and "Rent Free Period" was defined to mean the period from 1 September 2019 to 29 February 2020.
80 Clause 4.1(b) of the Incentive Deed provided as follows:
"4.1 Payment conditional 16 No 60/2024
The Tenant acknowledges that the Incentive Amount granted to the Tenant in this document is conditional upon the Tenant:
…
(b) performing and observing its obligations under the Lease (including the payment of the Bond) …".
81 In accordance with the terms of the Incentive Deed, the defendant paid no rent for the six months from September 2019 to February 2020 inclusive, and then paid rent at the reduced rates for the months from March 2020 to March 2021 inclusive. The result was that in respect of the period from 1 September 2019 to the termination of the lease on 19 March 2019 the rent that it paid was reduced by $68,906.85. The plaintiff contends that, since the defendant failed to perform and observe some of its obligations under the lease, it has lost the benefit of the Incentive Deed by virtue of clause 4.1(b) thereof.
82 In relation to this claim, the defendant has pleaded a defence of waiver. Although the plaintiff was aware of the construction of the awning and the lack of building approval, it continued to receive monthly payments of rent from the defendant at the reduced rate without demanding payment at the full rate, even after service of the building notice. The defendant contends that the plaintiff must therefore be taken to have waived its right to seek "repayment of rent abatements provided to the defendant".
83 I reject that contention. This is not a case where the plaintiff waived a contractual right by electing to pursue an alternative right. There is no evidence that the defendant acted to its detriment as a result of an expectation that the plaintiff would refrain from exercising a contractual right that it had by virtue of clause 4.1(b). There is no evidence that the plaintiff's staff ever said or did anything to indicate that it would not claim money from the defendant by virtue of clause 4.1(b) following a breach or breaches of the lease. Given that the breaches relating to the failure to obtain building approval were continuing breaches, the defendant could not reasonably have inferred that the plaintiff would never make a claim for money under clause 4.1(b). In the circumstances, there is no basis on which I can conclude that the plaintiff waived, or should be taken as having waived, any right that it had by virtue of that clause.
84 The defendant has also pleaded an estoppel defence in relation to this claim. It contends that it acted to its detriment by continuing to pay the reduced rental without any complaint or protest from the plaintiff; that it did not take any step or action to protect its interest so as to remain entitled to receive the rent abatement in accordance with the Incentive Deed; that the plaintiff's conduct in accepting reduced rent payments amounted to a representation that it would not seek "repayment of the rent abatement"; that it would suffer detriment if the plaintiff is able to resile from such a representation; and that it would be unjust and unconscionable for the plaintiff to do so.
85 I reject that contention. It is true that the plaintiff received monthly rent payments at the reduced rate until the termination of the lease in March 2021. Thereafter the defendant made further monthly rent payments at the reduced rate, but the plaintiff took the view that it should not accept them lest it be argued that it had elected to affirm the lease. Cheques for amounts equal to the rent payments for the months from April 2021 onwards were mailed to the defendant's solicitors, but they were not banked. It is true that the plaintiff did not ever say that the monthly payments that it was unwillingly receiving after the termination of the lease should have been larger. However nothing in the plaintiff's conduct before or after the termination could reasonably be regarded as a representation that the plaintiff would not press for payment of the "Incentive Amount" or part thereof. Further, there is no evidence that the defendant took or refrained from taking some step or action because of an expectation that the plaintiff would not seek to enforce its contractual rights in relation to the "Incentive Amount".
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86 The defendant has claimed damages for misleading and deceptive conduct in trade or commerce on the basis that the plaintiff's conduct in relation to the abatement of rent constituted a false representation. That claim must fail since there was no representation.
87 The defendant has pleaded that the plaintiff's conduct in relation to the Incentive Deed was unconscionable, and has sought orders preventing the plaintiff from recovering anything in respect of this claim, relying on ss 21 and 237 of the Australian Consumer Law. However the unconscionability defence is based solely on the plaintiff's conduct in not having ever claimed rent at the full rate before it did so in its pleadings. No argument was advanced to the effect that the plaintiff had received the benefit of expenditure by the defendant on an electrical upgrade.
88 The terms of the Incentive Deed were negotiated at arms length between experienced business people and their solicitors. The bargain that they agreed upon entitled the defendant to the benefit of the whole of the "Incentive Amount" conditionally upon it performing and observing all its obligations under the lease. Its breaches of the lease in relation to the awning were not transient or trivial. There has been nothing unconscionable in the plaintiff's conduct in relying upon its contractual rights in relation to clause 4.1(b).
89 For these reasons, there should be interlocutory judgment for a sum to be assessed in relation to the claim for rent based on the Incentive Deed.
The sawdust trespass issue
90 When the aerial photograph of 8 April 2020 was taken, the defendant company had begun to stockpile sawdust for use in its business, on vacant land of the plaintiff to the northwest of the area it was leasing. Mr Murphy gave evidence that an arrangement was made for a woodchip company to deliver fines from its operation. He contacted Mr Titmus, a property officer employed by the plaintiff company, and enquired about renting an additional area. On 25 May 2020 Mr Titmus sent a plan of the area to him by email and asked him to mark on the plan the area that he would like to lease.
91 A copy of an email of 25 May 2020 from Mr Murphy replying to Mr Titmus is before me. The email includes the plan of the area, with about a hectare on the northwest side of the leased area shaded in. Mr Titmus gave evidence that he had never seen that marked-up plan. It seems likely that Mr Murphy sent the email and that, for unknown technical reasons, it was not received. Mr Murphy gave evidence that he did not hear back from Mr Titmus, but that one day, in June 2020 he believed, his loader driver came in and said, "A guy from TasPorts has come out and put up some barriers and markers, and told me that we can use the area down to those markers."
92 The defendant contends that thereafter its storage of sawdust on the unleased land continued with the permission of the plaintiff company, given on its behalf by the "guy from TasPorts" who spoke to the loader driver. I reject that contention.
93 The plaintiff company is in the business of commercial leasing. There is evidence that its tenants at Bell Bay commonly require extra space on a short-term basis to store things like timber or shipping containers and that its management routinely arrange short-term leases. The conduct of the plaintiff's staff after June 2020 is entirely consistent with the plaintiff never having given permission to the defendant to store materials outside its leased area free of charge. Any such arrangement would have been inconsistent with its role as a landlord of commercial premises in leasing land for profit. If an employee of the plaintiff company spoke to the loader driver as asserted, I am not satisfied that that employee had the actual or ostensible authority of the plaintiff company to authorise the use of its land free of charge. That was not how the plaintiff company did business. Its officers routinely dealt with Mr Murphy, not a loader driver, and documented the arrangements that they made or sought to make. In all the circumstances I am not prepared to place any reliance on Mr Murphy's evidence about his conversation with the loader driver.
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94 Mr Murphy gave evidence to the effect that, after arrangements had been made with one company for the delivery of sawdust or fines, trucks from unknown sources started arriving by night, and that material was dumped beyond the area that the defendant was using for sawdust stockpiles. I regard that evidence as plausible. However there is no suggestion that Mr Murphy ever told anyone from the plaintiff company about the unsolicited deliveries of sawdust by night. His company appropriated and used that sawdust.
95 With effect from 20 July 2020 the plaintiff leased an area of land to the northwest of the defendant's leased land to Forestry Tasmania. Forestry Tasmania is a statutory corporation that is often referred to by its registered business name, "Sustainable Timber Tasmania". The southeast boundary of its leased land was parallel with, and about 36 metres distant from, the northwest boundary of the defendant's leased land. When its lease commenced, the defendant had sawdust stockpiles not only on the vacant land between the two leased areas, but also on about 2200 square metres of the land leased by Forestry Tasmania.
96 During the week commencing 13 July 2020 Mr Titmus had a discussion with Mr Murphy about the arrangements then being made for land to be leased to Forestry Tasmania. On 20 July 2020 Mr Titmus sent Mr Murphy an email advising that the lease had been signed and that it was commencing that day. He provided a plan showing the leased area. His email continued as follows:
"We noted on site that your delivery trucks have dumped your raw material
northwards beyond your lease boundary.
STT will take time to occupy the whole of their leased site.
Within the next 4 weeks (that is before 20 August 2020) you need to consume the material encroaching into STT lease area or push material to behind the boundary.
Need your action on this issue.
If storage space for material is mor than a very short term issue for your business, and will permanently require more than your original lease area boundary, we will need to enter into an additional lease.
Can you please consider that question and reply would be appreciated."
97 The defendant contends that the plaintiff thereby gave permission for it to use vacant land outside its leased area free of charge. I reject that submission. The defendant was trespassing on the plaintiff's land. The plaintiff wanted the defendant to cease trespassing in the near future or enter into an arrangement to pay rent. It did neither of those things.
98 Mr Murphy arranged for material on the land leased to Forestry Tasmania to be moved into the area between the two leased areas, with the stockpiles in that area becoming more concentrated or more dense. He gave evidence that that operation cost his company nearly $40,000.
99 On 14 October 2021 the defendant's solicitors wrote to the plaintiff's solicitors saying, "Our client is making every effort to have the fines moved so that they are within the boundaries of the leased premises by no later than Monday 25 October 2021." That did not happen.
100 The storage of substantial sawdust stockpiles outside the defendant's leased area continued until at least early 2023. Apart from the evidence as to someone speaking to a loader driver, there is no evidence that the plaintiff ever gave permission for the defendant to use any additional land to accommodate stockpiles of sawdust. The most that can be said is that the management were somewhat tolerant in relation to the defendant's use of additional land for that purpose.
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101 I am satisfied on the balance of probabilities that the defendant trespassed upon the plaintiff's land outside its leased area by storing raw materials on it throughout the period from 1 May 2020 to 30 June 2022 in respect of which it is claiming damages for trespass. Although the plaintiff asserted that the use of such land for the storage of raw materials constituted a breach of a term of the lease, the plaintiff is not claiming damages for breach of contract in respect of that use of its land.
102 In respect of the storage of raw materials on the plaintiff's land outside the land leased by the defendant, the plaintiff is entitled to recover from the defendant damages to be assessed. It is common ground that no damages are recoverable by the plaintiff in respect of any trespass on the land leased by Forestry Tasmania after that corporation's lease commenced.
The injunction application
103 The plaintiff has sought an order restraining the defendant from storing any materials on any part of the plaintiff's property. During his closing speech, counsel for the plaintiff told me that such an order would not be necessary if I made an order for the recovery of the leased land by the plaintiff. As I have decided to make such an order, I will not grant an injunction as sought, but will adjourn the application for an injunction sine die.
Conclusion
104 For these reasons I have decided to make the following orders:
1 A declaration that the lease executed by the parties and dated 11 March 2020 was terminated by the plaintiff on 19 March 2021.
2 An order that judgment be entered for the plaintiff against the defendant for recovery of possession of the 7950 square metres of land that were the subject of that lease, being part of the land comprised in Certificate of Title volume 135577, folio 1.
3 An order that judgment be entered for the plaintiff against the defendant for the recovery of sums to be assessed in respect of (a) mesne profits in respect of the said land for the period from 19 March 2021 until it is vacated by the defendant or earlier assessment; (b) damages for trespass in relation to adjoining land of the plaintiff; and (c) the "Incentive Amount" referred to in the "Incentive Deed" executed by the parties and dated 11 March 2020.
4 That the plaintiff's application for an injunction is adjourned sine die.
5 That the counterclaim is dismissed.
6 Liberty to apply.
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