Trust Company Ltd v Grays Professional Services Group Pty Ltd

[2010] QDC 278

DISTRICT COURT OF QUEENSLAND

CITATION:

Trust Company Ltd v Grays Professional Services Group Pty Ltd & Anor [2010] QDC 278

PARTIES:

TRUST COMPANY LTD

Plaintiff

AND

GRAYS PROFESSIONAL SERVICES GROUP PTY LTD

First defendant

AND

ANTHONY DAVID GRAY

Second defendant

FILE NO/S:

BD1121/09

DIVISION:

PROCEEDING:

Application

ORIGINATING COURT:

District Court, Brisbane

DELIVERED ON:

15 July 2010

DELIVERED AT:

Brisbane

HEARING DATE:

19 April 2010, 16 June 2010

JUDGE:

McGill DCJ

ORDER:

Application dismissed.

CATCHWORDS:

LANDLORD AND TENANT – Assignment of Reversion – effect on lease – effect of guarantee of tenant’s obligations – whether notice of assignment given

LANDLORD AND TENANT – Assignment of Lease – tenant and guarantor not discharged

LANDLORD AND TENANT – Covenants – breach – mitigation of loss – whether triable issue raised

PRACTICE – Summary Judgment – whether triable issue raised – whether cross-examination of deponent appropriate

Ahern v L.A. Wilkinson (Northern) Ltd [1929] St R Qd 66 – cited.
Forte-Senes Hotels Pty Ltd v Austcorp No. 473 Pty Ltd [2004] NSWCA 31 – cited.
Gumland Property Holdings Pty Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237 – considered.
Hutchens v Deauville Investment Pty Ltd (1986) 61 ALJR 65 – cited.
International Leasing Corporation Ltd v Aiken [1967] 2 NSWR 427 – considered.
P. & A. Swift Investments v Combined English Stores Group Plc [1989] 1 AC 632 – cited.
Richardson v Landecker (1950) 50 SR (NSW) 250 cited.
Simmons v Lee [1998] 2 Qd R 671 – cited.
195 Crown Street Pty Ltd v Hoare [1969] 1 NSWR 193 – cited.

COUNSEL:

D.E.F. Chesterman for the plaintiff

The second defendant appeared for the defendants

SOLICITORS:

Holman Webb Lawyers for the plaintiff

Synergy Group Legal Pty Ltd for the defendants

1. This is an application for summary judgment under r 292.  In essence, the plaintiff sues the first defendant for money payable under a lease, and the second defendant for money payable under guarantee of the first defendant’s obligations under the lease.  The claim was filed on 23 April 2009, and notices of intention to defend were filed, on 22 June 2009 on behalf of the first defendant, and on 12 February 2010 on behalf of the second defendant.  This application was then filed on 23 March 2010.  It came before me on 19 April 2010, when it was adjourned to 16 June 2010 to enable the plaintiff’s advisors to consider certain matters which had arisen in the course of the hearing.  Subsequently, further affidavit evidence was filed on behalf of both parties.

The lease and its history

1. There has been some complexity in the history of this lease.  By a lease executed on 30 May and 6 June 2005 and subsequently registered, Edgerow Pty Ltd, the then owner of a building erected on land at Surfers Paradise, leased part of the first floor of the building to the first defendant for a term of five years commencing 1 March 2005.[1]  The lease contained in Clause 56 a guarantee by the second defendant, and was executed by the second defendant on 31 May 2005.

   [1]Affidavit of Griffiths filed 23 March 2010, para 4, Exhibit CAG2.

1. The lease provided for the payment of rent, and in addition contained the following relevant provisions:

“26.3You must carry on your business and use the premises to the best of your ability, and in a professional and competent way.

28.1You must not deal with the premises (for example, by assigning, subleasing, sharing or licensing).

29.2You must keep the premises in good condition, except for fair wear and tear including carrying out any repairs and fixing any damage you cause.

29.4You must … repaint the premises at least once during the lease but not later than one year before the end of the lease.

31.When the lease ends you must:

(a)vacate the premises and give them back to us in the same condition as they were in at the start of the lease, except for fair wear and tear;

(b)remove all your property, making good any damage that you cause;

…

(e)immediately give us all keys and access devices that you have for the premises and the centre.

39.1We may deal with all or part of the centre in any way which we see fit (for example, subdividing, amalgamating and granting easements, transferring or strata titling.”).

39.3If we transfer the centre:

(a)we are released from our obligations under the lease from the date of the transfer (if we transfer the whole centre); and

(b)we must ensure that the new owner signs an agreement with you binding the new owner to the terms of the lease.

52.2If you breach the lease and do not remedy it as required, or if the breach cannot be remedied, we may do any one or more of the following:

(b)terminate the lease;

(c)recover from you or the guarantor any loss we suffer due to your breach … .

52.3If you breach an essential term of the lease and we terminate the lease, then we may recover all money payable by you according to the lease up to the expiry date but we must try to minimise our loss.[2]

[2]This clause went on to list the essential terms of the lease, which included the covenant to pay rent.

56.1The guarantor agrees that the guarantor is liable to us if you or any person to whom you assign the lease breaches the lease.  The guarantor agrees to pay us any money for our loss and due to the breach.  Where the guarantor guarantees your obligation to pay us any money under this lease, that amount is a liquidated debt immediately due and owing from the guarantor to us.

56.2The guarantor is liable:

(b)even if the lease is varied;

(f)even if we have breached this lease;

(h)even after we have assigned our rights under this lease or you have assigned your rights under this lease.

56.3We may recover from the guarantor damages for our losses in enforcing this guarantee.

56.6If we sell the centre, we may also assign the benefit of all of the guarantor’s obligations in this clause.”

1. Edgerow Pty Ltd entered into a contract dated 29 June 2006 to sell the freehold to the plaintiff.[3]  That contract provided expressly that Edgerow Pty Ltd assigned to the plaintiff the benefit of all conditions contained in any leases on the part of the tenant or other occupier of the land given in favour of Edgerow Pty Ltd, and the benefit of all guarantees capable of assignment held by Edgerow Pty Ltd in respect of the leases.[4]  The contract also provided that Edgerow Pty Ltd would prepare and execute appropriate notices to give effect to those assignments.[5]  That contract was completed on 6 September 2006, and the plaintiff took possession on that date.  The previous day, however, the plaintiff had entered into a lease of the entire property to Rozendale Pty Ltd, as from 6 September 2006, which took effect subject to the existing leases including the lease to the first defendant.[6]  In effect, the plaintiff granted a lease of the reversion on those leases.[7]

   [3]Affidavit of Prince, filed 10 June 2010, para 3, Exhibit KP1.

   [4]Clause 16.3.  There was a reservation in relation to unpaid rent as at the date of possession under that contract, which is irrelevant for present purposes.

   [5]Clause 16.4.

   [6]Affidavit of Prince, filed 10 June 2010, para 7, Exhibit KP3.

   [7]Indeed, strictly speaking it leased to that company only that part of the building which was subject to an existing lease or agreement for lease.

1. This put Rozendale Pty Ltd into the position of a head lessee in relation to the whole of the shopping centre, so that the existing lessees became sub-lessees of Rozendale Pty Ltd.  The head lease contained an acknowledgment by the plaintiff of the absolute right of Rozendale Pty Ltd to receive all rental and other amounts payable under the existing leases or unregistered leases or subleases of parts of the land, including relevantly the lease to the first defendant:  Clause 2.1.  Counsel for the plaintiff, however, conceded that this lease did not contain any express assignment of the benefit of, relevantly, the guarantee of the second defendant.

1. Edgerow Pty Ltd prepared notices to tenants, and notices to guarantors of tenants, including a notice addressed to the first defendant, signed on its behalf by its solicitors and dated 6 September 2006, giving notice that on 6 September 2006 it had sold to the plaintiff its interest in the lease and assigned to the plaintiff all its rights under the lease including the right to receive all amounts payable under the lease after the settlement date.[8]  The notice to the second defendant, which was also dated 6 September 2006 and signed by solicitors on behalf of Edgerow Pty Ltd, gave notice that the property had been transferred, together with an assignment of all the lessor’s rights, privileges and powers under the lease to the plaintiff with effect from 6 September 2006, and that the guarantee and indemnity provided by the second defendant in relation to the lease had also been assigned to the plaintiff with effect from that date.

   [8]Affidavit of Prince, para 6, Exhibit KP2; Affidavit of McDonnell, filed 19 April 2010, para 6.

1. The evidence in relation to these notices is that on or about 6 September 2006, a representative of the company or group of companies that manages the centre on behalf of the plaintiff handed to a representative of Rozendale Pty Ltd these notices for distribution to tenants including the first and second defendants, and instructed that representative to serve those notices.[9]  The representative of the management group had informed the legal counsel for that management group that he has no reason to suspect that these notices were not delivered in the normal way.  There is, however, no affidavit evidence from anyone who purported to deliver or serve either notice on either defendant.

   [9]Ibid.

1. The second defendant has sworn in an affidavit filed on 16 April 2010[10] that neither the first defendant nor the second defendant ever received these notices: para 4. In these circumstances, there seems to me to be an issue as to whether notice was in fact ever given to the defendants of the assignment of Edgerow’s interest in the land and the guarantee to the plaintiff. So far as the first defendant is concerned, this may not be of any particular significance, because the assignment was effective in law by virtue of the sale of the freehold. So far as the second defendant is concerned, however, the express assignment of the benefit of the guarantee, which is a chose in action, is effective at law only if notice was given of the assignment to satisfy the requirements of s 199 of the Property Law Act. The assignment will still be effective in equity in the absence of notice, but an action by an equitable assignee must be brought in the name of the assignor, or must at least join the assignor as a party to the action, which has not been done here. Accordingly, the plaintiff cannot sue the second defendant as assignee of the benefit of the guarantee on the basis of the assignment unless the requirements of s 199 of the Property Law Act were satisfied.

   [10]As appears for the index to the file, although the affidavit itself is not on the file; document no. 17 is missing from the file.  Document no. 18, a document which I gave leave to read and file on 19 April 2010, is incorrectly recorded in the file index as a “draft order”.

1. I accept that in some circumstances notice may be effectively given for the purposes of s 199 even though it does not in fact come to the attention of the person to whom it has been given. However, before that point is reached, it is necessary to show that the requirements which trigger the operation of the relevant statutory presumption have been satisfied. The plaintiff’s evidence in the present case does not go that far, and accordingly that remains an issue to be resolved.

1. This would not be a problem if the benefit of the guarantee ran with the land, that is to say if the benefit passed to the plaintiff on the sale of the freehold[11] without the need for any express assignment.  The plaintiff relied on the decision of Gumland Property Holdings Pty Ltd v Duffy Brothers Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237 at [96]-[100] as authority for the proposition that, following the decision of the House of Lords in P. & A. Swift Investments v Combined English Stores Group Plc [1989] 1 AC 632, the benefit of a guarantee of the obligations under a lease could be enforced without express assignment because the covenant touched and concerned the land, as shown by the fact that the covenant was given not only to the lessor named in the lease but its successors and assigns.

   [11]Strictly speaking, on the transfer in law, that is, on the registration of the memorandum of transfer.

1. In the present case, on the face of the lease of Clause 56, the covenant in the guarantee was given only to Edgerow Pty Ltd, that being the meaning attributed to the term “we” or “us” by Clause 1.1 of the lease, but Clause 2.2(f) provides that a reference to a party includes that party’s personal representatives, successors and assignees, and although the term “party” does not appear to be defined, presumably it is a reference to the parties to the lease including Edgerow Pty Ltd.[12]  On the other hand, the guarantee provided expressly in Clause 56.6 that “if we (i.e. Edgerow Pty Ltd) sell the centre, we may also assign the benefit of all of the guarantor’s obligations in this clause.”  It also provided in Clause 56.2(h) that “the guarantor is liable … even after we have assigned our rights under this lease … .”  The terms of those provisions suggest that the benefit of the guarantee will not necessarily run with the land, and may or may not pass to an assignee of the freehold, depending on whether or not Edgerow Pty Ltd chooses to assign the benefit of the guarantee in the clause.  Whether or not the benefit of a guarantee of the obligations under a lease runs with the land depends in part on the terms of the guarantee, which must be considered as a whole.  In the circumstances, it seems to me that the issue of whether or not the benefit of the guarantee ran with the land in the present case in the absence of express assignment raises at least a tryable issue for the purposes of this proceeding.

   [12]See, in any case, Property Law Act 1974 s 53(1): Simmons v Lee [1998] 2 Qd R 671.

1. Apart from the issue of whether the present plaintiff can sue on the guarantee, there is a question as to the effect of the lease to Rozendale Pty Ltd.  Once that lease was entered into, the right to receive rent and other payments under the lease to the first defendant passed from the plaintiff to Rozendale Pty Ltd.[13]  If the guarantee ran with the land, then the benefit of that guarantee also passed to Rozendale Pty Ltd, and there would be no difficulty, but if the guarantee did not run with the land (and for the reasons I have just given it seems to me that there is at least an issue worthy of consideration at a trial on that point), there was no express assignment of the benefit of the guarantee.  In those circumstances, a situation arose where the party having the benefit of the guarantee was different from the party having the benefit of the principal obligation.

   [13]Property Law Act 1974 s 117.

1. In International Leasing Corporation Ltd v Aiken [1967] 2 NSWR 427 at 439 Jacobs JA said:

“If the debt is assigned but the guarantee is not assigned then the right in the original creditor to recover under the guarantee must at least be suspended so long as the debt is assigned.  There cannot be two persons entitled to recover the amount of the same debt, one from the principal debtor, and so long as the principal debtor was in default, another from the surety.”

1. That proposition was approved by the High Court in Hutchens v Deauville Investment Pty Ltd (1986) 61 ALJR 65 at 68, with the qualification that the consequence would be less clear if, in the case of the assignment of the debt with the purported retention of the benefit of the guarantee, the assignee of the debt had rights of recourse against the original creditor in the event of default by the principle debtor. In the present context, that would be applicable if Rozendale Pty Ltd had a right of recourse against the plaintiff in respect of the first defendant’s obligation to pay rent and other amounts payable under its lease. It does not appear, however, that there was any such right of recourse; I do not claim to have examined the lease to Rozendale Pty Ltd in great detail (it is a lengthy document of some complexity) and it may not be the only relevant instrument between the parties, but I note that Clause 11.2 provides a right of indemnity by Rozendale Pty Ltd to the plaintiff, something which I would not expect to find co-existing with a right of recourse by Rozendale Pty Ltd against the plaintiff.

1. In the absence of assignment of the benefit of the guarantee, therefore, during the term of the lease to Rozendale Pty Ltd, the obligation under the guarantee was “at least suspended”.  However, the lease to Rozendale Pty Ltd was, as I have said, terminated prior to the time when the default arose in the present matter.  Once that occurred, the difference between the parties which existed during the term of the lease and which brought into operation the principle approved in Hutchens (supra) disappeared.  If that principle did produce only the suspension of the obligation under the guarantee, it seems that, at that point, that obligation would have revived.

1. In circumstances where Jacobs JA used the expression “at least suspended”, and that was the expression approved by the High Court, it is difficult to be confident about the proposition that the effect on the guarantee in those circumstances was that it was at most suspended.  The alternative, of course, is that the guarantee was discharged by the fact that the obligation to pay the principal debt under the lease was transferred, but the actual terms of the guarantee are against that, because it expressly provides that the guarantor was liable even after “we have assigned our rights under this lease”, as mentioned earlier.  If the benefit of the guarantee in those terms passed by assignment to the plaintiff, it would seem to follow that the benefit of the guarantee was not lost by the plaintiff merely by assigning, and hence by leasing, its rights under the lease, so that its rights were merely suspended, in the practical sense that it could not sue on the guarantee in respect of moneys payable to Rozendale Pty Ltd.  But if the guarantee remained in place, then it was available once the obligations under the lease came to be owed again to the plaintiff.  It does not appear, therefore, that the fact that for a time the plaintiff had leased the whole centre to Rozendale Pty Ltd has any adverse effect on the plaintiff’s ability to recover from either defendant.

Purported assignment by the lessee

1. The defendants’ principal argument, advanced in particular in the initial affidavit of the second defendant, was based on the proposition that it had handed over the premises to another company, Stacks Northern Rivers Pty Ltd (“Stacks”), as from 1 January 2007, with the knowledge and consent of a Mr Hubbard, the person who was then managing the building, and that this took effect as an assignment of the first defendant’s interest under the lease to that company so that the first defendant was discharged from its obligation under the lease, and hence had no obligation which was subject to the second defendant’s guarantee.[14]  The plaintiff’s affidavit evidence is to the effect that Mr Hubbard had been engaged by Rozendale Pty Ltd to manage the premises, but that that arrangement came to an end in August 2007, after which time the premises were managed by someone associated with the plaintiff.

   [14]See affidavit of the second defendant, sworn 15 April 2010, paras 10, 11, 12, 14.

1. The plaintiff has not been able to make contact with Mr Hubbard; a representative of Rozendale Pty Ltd advised earlier this year that a previous attempt to locate Mr Hubbard on an unrelated matter was unsuccessful, and other efforts by the plaintiff to contact Mr Hubbard have also been unsuccessful.[15]  The plaintiff’s position is that Mr Hubbard did not have authority to approve an assignment of the lease on behalf of the plaintiff, and that therefore any purported assignment of the lease was unauthorised and did not have the effect of discharging the liability of the first defendant.[16]

   [15]Affidavit of Prince, para 20.

   [16]Affidavit of McDonnell, paras 7, 13, 18.

1. Apart from this, there is nothing in the second defendant’s affidavit to suggest that Mr Hubbard did anything which would purport to be a release of the first defendant from its obligation under the lease.  If a tenant assigns a lease, that does not have the effect of discharging the tenant,[17] unless the lease provides to that effect (and the present one does not appear to do so) or unless there is an express release granted by the landlord in connection with the assignment, and there was certainly no release in writing in the present case from either Rozendale Pty Ltd or the plaintiff, nor was there any evidence of a purported release by Mr Hubbard which might give rise to some other defence.  Nor was there evidence of anything which would amount to surrender by operation of law with a view to a new lease to Stacks.[18]

   [17]Ahern v L.A. Wilkinson (Northern) Ltd [1929] St R Qd 66 at 78-9; Richardson v Landecker (1950) 50 SR (NSW) 250; Forte-Senes Hotels Pty Ltd v Austcorp No. 473 Pty Ltd [2004] NSWCA 31.

   [18]See the discussion in 195 Crown Street Pty Ltd v Hoare [1969] 1 NSWR 193.

1. The second affidavit by the second defendant[19] deposed to having entered into arrangements with Stacks on the basis that Rozendale Pty Ltd and that company would deal directly and sort out all matters between them on the basis that the defendants were released from their obligation on and from 1 January 2007.  However, he did not depose to anything which objectively could be identified as a release or purported release of the defendants’ obligations on the part of Rozendale Pty Ltd or anyone else.  In these circumstances, I am not persuaded that the defendants have made out a tryable issue on the evidence before me as to whether the effect of the dealings they had with Mr Hubbard and Stacks was to discharge them from the obligations under the lease and guarantee.  It may well be that Rozendale Pty Ltd, or for that matter the plaintiff, was happy to deal with Stacks so long as they continued to pay the rent and discharge the other obligations under the lease, but once that company vacated the premises the plaintiff was entitled to look to the defendants to make good their obligations under the lease and guarantee.

   [19]Filed 15 June 2010.

Other matters raised as defences

1. It was further submitted on behalf of the defendants that the fact that the plaintiff had entered into the lease with Rozendale Pty Ltd prior to the time when notices of the assignment were given from Edgerow Pty Ltd to the plaintiff meant that the obligations were not enforceable.  It does not seem to me, however, that there is any substance to this argument.  If the benefit of the obligation passed by operation of law then it passed automatically without any notice, as was the case with the obligation on the part of the first defendant to pay rent and make other payments under the lease.  If the obligation required express assignment, as seems to me to have been the case with the obligation of the second defendant under the guarantee, although that assignment would not take effect at law until after the notice had been given, it was then effective, and for the reasons outlined earlier did not cease to be effective merely because of the fact that for a time the obligation on the first defendant to pay rent was owed to someone else.  What matters is that the lease to Rozendale Pty Ltd had come to an end prior to the time when any of the obligations which are now being sued on arose.

1. Another matter raised on behalf of the defendants was that there had been a failure to mitigate on the part of the plaintiff, because, once the defendants found out that Stacks had vacated the premises, the second defendant introduced a prospective alternative tenant.  This was deposed to in the affidavits of the second defendant, and supported by the affidavit of Mr O’Malley,[20] who said that on or around 11 February 2009 a business with which he was associated required premises for rental in the Surfers Paradise area, that the relevant premises were suitable for their use and that he considered the rental reasonable.  He deposed to a willingness on the part of that business to enter into a lease arrangement with respect to the premises immediately.  The second defendant deposed to having provided information about him to the then centre manager, and to having provided Mr O’Malley with the then centre manager’s mobile telephone number.  Mr O’Malley said that he attempted to contact her on a number of occasions without success, and left messages confirming details but did not receive a return call.  In the event, his business entered into a lease of premises of a similar size and rental but in a different place.  He said, however, that he would have preferred the Surfers Paradise premises.

   [20]Filed 15 June 2010.

1. On the face of it, that is in my view sufficient evidence to indicate that a defence of failure to mitigate may well have some real prospect of success at a trial.  It is true that more information could have been provided; a copy of the lease which was ultimately entered into was not exhibited, and it is true that Mr O’Malley does not provide all of the information which might have been required by the plaintiff before approving as a tenant the business with which he was associated.  I accept that the question of whether the plaintiff took reasonable steps to mitigate its damage relates to what the plaintiff would do in the ordinary course of business,[21] but ultimately the question depends not on whether the plaintiff would in fact have accepted Mr O’Malley’s business as an alternative tenant but on whether the court thinks that the plaintiff would have acted unreasonably if it had failed to accept that business as an alternative tenant. On the face of the affidavit material, Mr O’Malley’s business was accepted as a tenant by another landlord of similar premises elsewhere on the Gold Coast, and that suggests that there is at least a reasonable prospect that the court would find that, had Mr O’Malley’s business been rejected as a tenant, the plaintiff would have been acting unreasonably.

   [21]Luxer Holdings Pty Ltd v Glenthan Pty Ltd (2007) 35 WAR 254 at [61].

1. The plaintiff’s counsel sought the opportunity to cross‑examine Mr O’Malley on his affidavit if the issue of summary judgment was to turn only on the question of mitigation.  For reasons I have already given, the issue as against the second defendant does not turn solely on the question of mitigation, so it is unnecessary to pursue this notion further.  It seems to me on reflection, however, that it would not be appropriate in any case to have cross-examination in these circumstances essentially just with a view to persuading the court to disbelieve things that were said in the affidavit.  I accept that there is no rule that cross‑examination will not be allowed in relation to summary judgment applications.  Sometimes there are things said in an affidavit which invite disbelief but which ought not be disbelieved without giving the deponent the opportunity presented by cross‑examination to provide any explanation which may be available.  Sometimes there are documents which are on their face inconsistent with what is said in an affidavit, but again the conflict cannot be appropriately resolved by rejecting what is said in the affidavit without putting the apparent inconsistency in cross‑examination.  In the present case, however, the affidavit on its face is not obviously implausible, and the plaintiff’s counsel did not support the application with reference to any such apparently inconsistent documents.  The impression I obtained was that what was proposed was simply an attempt to throw up issues which would provide some support for an argument that Mr O’Malley’s business really was not a reasonable alternative tenant for the plaintiff.  I do not think that that is a sufficient justification for cross‑examination on an affidavit in an application under r 292.

1. In my view, cross‑examination on affidavits used in summary judgment applications should remain the exception rather than the rule.  Apart from anything else, an alternative practice would risk turning such an application into a mini‑trial, which is not the purpose of the rule.  The purpose of the rule and the correct application of it have been explained in a number of decisions of the Court of Appeal; it is sufficient for present purposes simply to note that the rule is intended to apply in circumstances where the outcome is sufficiently clear to justify giving judgment in a summary way.  It is not intended to provide the plaintiff with an opportunity to run a mini trial in advance of the real trial.  Apart from the fact that that is not an efficient use of the resources of the court, it also strikes me as unfair in a situation where one litigant has a much deeper pocket than the other, as may well be the case here.  Accordingly, I am not prepared to adjourn the further hearing of the application anyway to allow cross‑examination of Mr O’Malley on his affidavit.

1. Two other matters were raised on behalf of the plaintiff.  The  person who was then the manager of the property, with whom the second defendant claims to have had the conversation, has in effect disputed that she was advised of the alternative tenant; this was based on a contemporaneous email which made no mention of any alternative tenant.[22]  That, however, is not an issue which I should resolve on the hearing of an application of this nature.  It was also submitted that it was inherently unlikely that the plaintiff would have passed up the opportunity to get a suitable tenant as quickly and easily as that if there were such a suitable tenant really on offer at that time.  That argument would have been more convincing if the landlord had been a real person who managed the premises himself.  The notion that a particular individual within a relatively large organisation who had other responsibilities failed to follow up a particular contact does not strike me as inherently improbable.

   [22]Affidavit of Prince, paras 22-24.

1. A further argument was advanced that the failure to mitigate defence at best would mean that the plaintiff would be unable to recover in respect of the loss of rent etc after 1 March 2009, so that there was a period of about three months where the rent was recoverable anyway.  Accordingly, it was appropriate to give judgment for part of the claim and allow the rest to go to trial.  It may be that strictly speaking that is correct, at least for the claim against the first defendant, but in circumstances where it seems to me there has to be a trial in respect of the great bulk of the claim, it is not immediately apparent that there will be any real advantage to the plaintiff in taking that course.  I suspect that it will only be a judgment against the second defendant that will be of any real value to the plaintiff.

1. In the circumstances, therefore, the application for summary judgment is refused.  I assume that the defendants will file amended defences; I do not think they require leave to do so.  I will hear submissions in relation to the question of costs.