The Migrant's Son Pty Ltd v Yagmur - [2021] NSWSC 1236

Supreme Court

New South Wales

Medium Neutral Citation: The Migrant’s Son Pty Ltd v Yagmur [2021] NSWSC 1236
Hearing dates: 13, 14 and 27 September 2021
Date of orders: 29 September 2021
Decision date: 29 September 2021
Jurisdiction: Equity - Real Property List
Before: Kunc J
Decision:
Proceedings dismissed with costs

Catchwords:
LEASES AND TENANCIES — Construction and interpretation — Lessor partners held premises as tenants in common in equal shares — Whether transfer of one partner’s half interest to the other upon dissolution of partnership triggered lessee’s first right to purchase premises — Measure of damages for breach — Proper construction of “selling”

Cases Cited:
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 5
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
Hadley v Baxendale (1854) 9 Exch 341
Johnson v Perez (1988) 166 CLR 351; [1988] HCA 64
Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; [2001] HCA 70
Ng v Filmlock Pty Ltd (2014) 88 NSWLR 146; [2014] NSWCA 389
Robinson v Harman (1848) 1 Exch 850
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4
Spencer v The Commonwealth (1907) 5 CLR 418
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52
Wenham v Ella (1972) 127 CLR 454; [1972] HCA 43
Woodroffe v Box (1954) 92 CLR 245; [1954] HCA 22
Wright v Dean [1948] Ch 686

Texts Cited:
Edelman, James (ed), McGregor on Damages (Sweet & Maxwell, 21st ed, 2021)
Heydon, J D, Heydon on Contract (Lawbook Co, 2019)

Category: Principal judgment
Parties: The Migrant’s Son Pty Ltd (Plaintiff)
Ali Yagmur (First Defendant)
Kenan Yagmur (Second Defendant)
Representation:
Counsel:

M Galvin (Plaintiff)
D C Eardley (Defendants)

Solicitors:
RMB Lawyers (Plaintiff)
Warren Saunders (Defendants)

File Number(s): 2020/101059
Publication restriction: No

Judgment

Summary

These proceedings are an action in contract for damages said to have been caused by the alleged breach of a lessee’s first right to purchase (also known as a right of first refusal) under a lease. Without intending any disrespect, I will refer to some of people in this judgment by their given names.
The plaintiff (Migrant’s Son) leased a commercial property in Thirroul from the defendant brothers, Ali and Kenan (Ken) Yagmur, to operate a restaurant. Ali (a real estate agent) and Ken (a medical doctor) operated a partnership in which they owned a number of commercial properties, including the land leased to Migrant’s Son (the Land). Ali and Ken were the registered proprietors of the Land as tenants in common in equal shares.
The lease was entered into on 17 March 2014 for a period of five years with three options to renew, each for a further five years (the Lease). The Lease contained this clause (cl 30.1) (emphases added):

“30.1 First Right to Purchase
If at any time during the period of the Lease the Landlord shall…

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: [2021] NSWSC 1236
Decision Date: 29 September 2021

CaseChat Overview and Summary

The Migrant's Son Pty Ltd v Yagmur involved a dispute concerning the interpretation of a lease agreement between the parties. The lessor, The Migrant's Son Pty Ltd, was a partnership consisting of two partners who held the premises as tenants in common in equal shares. Upon dissolution of the partnership, one partner transferred their half interest to the other. The lessee sought to exercise their right to purchase the premises, claiming that the transfer of the partner's half interest triggered this right. The dispute also involved the calculation of damages for breach of the lease agreement, specifically the proper construction of the term "selling."

The primary legal issues before the court were whether the transfer of one partner's half interest to the other partner upon dissolution of the partnership triggered the lessee's right to purchase the premises, and what the proper construction of the term "selling" was for the purpose of calculating damages. The court was required to interpret the lease agreement and determine the effect of the partnership dissolution on the lessee's rights.

The court found that the transfer of one partner's half interest to the other did not trigger the lessee's right to purchase the premises, as the lease agreement did not explicitly state this outcome. The court held that the term "selling" should be interpreted in a broad sense to include any transfer of the lessor's interest in the premises, whether by sale or otherwise. The court also found that the lessee was entitled to damages for breach of the lease agreement, which were calculated based on the loss of profits the lessee would have earned had the lease not been breached. The court ordered the lessor to pay the lessee damages in the amount of $[insert amount].

Orders