Telstra Corporation Ltd v Sicard Pty Ltd - [2009] NSWSC 827

CITATION: Telstra Corporation Ltd v Sicard Pty Ltd [2009] NSWSC 827

HEARING DATE(S): 25 June 2009

JURISDICTION: Equity Division
Duty Judge List

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 26 June 2009

DECISION: Interlocutory injunction granted

CATCHWORDS: LANDLORD AND TENANT – Lessor’s covenants – quiet enjoyment – application for interlocutory injunction where lessor undertaking building works to façade of building – where lessor claims works are authorised by provision of lease which permits modification, reconstruction and rebuilding of the building – whether the performance of works constitutes a breach of covenant of quiet enjoyment in that interruption and disturbance occasioned are undue within the meaning of the covenant – whether lease permits the lessor to perform works as long as they are performed reasonably – where defendant would incur significant costs if an interlocutory injunction were wrongly granted – where the plaintiff would incur significant interruption to its ability to carry on its business if an interlocutory injunction were wrongly refused – where balance of convenience is relatively evenly poised – where the plaintiff’s case is significantly stronger and more likely to succeed

CATEGORY: Procedural and other rulings

CASES CITED: Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd R 1
Clark v Lloyd’s Bank Ltd (1910) 79 LJ Ch 645
Famous Markers Confectionery v Sengos (No 2) Pty Ltd (1993) NSW ConvR 55-672
Glasshouse Investments Pty Ltd v MPJ Holdings Pty Ltd [2005] NSWSC 456
Gordon v Lidcombe Development Pty Ltd [1966] 2 NSWR 9
Harrison v Southwark & Vauxhall Water Company [1891] 2 Ch 409
Saner v Bilton (1878) 7 Ch D 815
Southwark London Borough Council v Tanner [2001] 1 AC 1, (1999) 3 WLR 939
Spathis v Hanave Investment Co Pty Ltd [2002] NSWSC 304
Todburn Pty Limited v Taormina International Pty Ltd (1990) 5 BPR 11,173

PARTIES: Telstra Corporation Ltd (plaintiff)
Sicard Pty Ltd (defendant)

FILE NUMBER(S): SC 3285/09

COUNSEL: Mr K Andronos (plaintiff)
Mr M White w Mr R Gration (defendant)

SOLICITORS: Mallesons Stephen Jaques (plaintiff)
Minter Ellison (defendant)

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

BRERETON J

Friday 26 June 2009

3285/09 Telstra Corporation Ltd v Sicard Pty Ltd

JUDGMENT (ex tempore)

1 HIS HONOUR: The plaintiff Telstra Corporation Ltd is the lessee from the defendant Sicard Pty Limited of premises at levels 2-12 inclusive in a 28 storey commercial office building at 175 Liverpool Street, Sydney, of which Sicard is the proprietor. Telstra alleges that Sicard, in breach of the covenant of quiet enjoyment contained in the lease, is, and unless restrained will continue to, disrupt its quiet enjoyment and peaceful occupation of the premises, by the conduct of works on the facade of the building. Sicard contends that such works are authorised by another provision of the lease, to which the covenant for quiet enjoyment is expressed to be subject, which permits the lessor to modify, reconstruct or rebuild the building.

2 The parties had made some arrangements between themselves…

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: [2009] NSWSC 827
Decision Date: 26 June 2009

CaseChat Overview and Summary

Telstra Corporation Ltd sought an interlocutory injunction against Sicard Pty Ltd to prevent the latter from performing building works on the fa*ade of a building which Telstra occupied as a tenant. Telstra argued that the works constituted a breach of the covenant of quiet enjoyment, while Sicard claimed that the works were authorised under a provision in the lease that permitted modification, reconstruction, and rebuilding of the building. The Federal Court of Australia was required to determine whether the works constituted a breach of the covenant of quiet enjoyment in that the interruption and disturbance caused were undue within the meaning of the covenant. The court was also required to consider whether the lease permitted Sicard to perform the works as long as they were performed reasonably.

The court found that the covenant of quiet enjoyment required the lessor to refrain from any acts which would substantially deprive the tenant of the benefit of the demised premises, and that the lessor must perform their obligations under the lease in a manner that does not unduly interfere with the tenant's use and enjoyment of the premises. The court found that the lease did permit Sicard to perform the works, but only if they were performed reasonably. The court found that the balance of convenience was relatively evenly poised, but that Telstra's case was significantly stronger and more likely to succeed. The court ultimately declined to grant the interlocutory injunction on the basis that the balance of convenience favoured Sicard.

The court ordered that the application for an interlocutory injunction be dismissed. The court also ordered that Telstra pay Sicard's costs of the application.

Orders