Water Wine and Juice v Konstantopoulos - [2009] NSWSC 1475

CITATION: Water Wine & Juice v Konstantopoulos [2009] NSWSC 1475

HEARING DATE(S): 16 December 2009

JURISDICTION: Equity Division

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 16 December 2009

DECISION: See paragraph [16] of the judgment.

CATCHWORDS: EQUITY - lessee's interlocutory application for injunctive relief - lessor exercising right of re-entry following lessee's failure to comply with notice of breach of covenant issued pursuant to Conveyancing Act 1919 s 129 - whether serious question to be tried as to whether there was a breach of lease - no discretionary considerations relied upon that relief should be withheld - injunctive relief granted. - LANLORD AND TENANT - Conveyancing Act 1919 s 129 - lessee's failure to comply with notice of breach of covenant.

LEGISLATION CITED: Conveyancing Act 1919

CATEGORY: Procedural and other rulings

PARTIES: Water Wine & Juice Pty Limited (Plaintiff)
Steve Konstantopoulos (First Defendant)
Rosa Konstantopoulos (Second Defendant)

FILE NUMBER(S): SC 2009/291740

COUNSEL: A Martin (Plaintiff)
D M Flaherty (Defendant)

SOLICITORS: Champion Legal (Plaintiff)
DC Chambers & Associates (First and Second Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

McDOUGALL J

16 December 2009 (ex tempore – revised 16 December 2009)

5692/09 WATER WINE & JUICE PTY LTD v STEVE KONSTANTOPOULOS AND ANOR

JUDGMENT

1 HIS HONOUR: The defendants are the lessors to the plaintiff of premises at Fairfield. The premises are used by the plaintiff for the purposes of a business. There is evidence, unchallenged for today's purposes, that if the plaintiffs are deprived of the use of the premises it will cause very significant disruption and loss, including what might be called collateral damage to employees of the plaintiff.

2 The plaintiff's case is that it holds the premises on a four-year lease from the defendants, and that it has exercised the first of three three-year options for renewal contained in that lease. As the application has been run today, I proceed (as Mr Flaherty of counsel for the defendants said I could) on the basis that there is a serious question to be tried, at the very least, that the option has been validly exercised.

3 There is an unfortunate history of dispute between the plaintiff and the defendants. It is clear on the plaintiff's evidence that it has not always been an ideal tenant. In particular, its attitude towards rental appears to have been that it would pay it on time if it could, but not otherwise. Those matters are not perhaps relevant to the question with which I am concerned today, but I suspect that they help to explain the attitude taken by the defendants.

4 The defendants’ case today is that, assuming (as they agree I should do) that the plaintiff has made out a serious question to be tried as to the valid exercise of the option for renewal, nonetheless the plaintiff cannot succeed because, after the option was exercised, the defendants gave the plaintiff notices under section 129 of the Conveyancing Act 1919, two of which notices…

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 1475
Decision Date: 16 December 2009

CaseChat Overview and Summary

In the case of Water Wine and Juice v Konstantopoulos, the plaintiff, a tenant, sought injunctive relief from the court against the defendant, the landlord, who had issued a notice of breach of covenant under section 129 of the Conveyancing Act 1919. The plaintiff had failed to comply with the terms of the notice, prompting the defendant to exercise the right of re-entry. The plaintiff contested the validity of the re-entry, arguing that there was a serious question to be tried regarding the existence of a breach. The court was tasked with determining whether a serious question existed as to whether there was a breach of the lease and if the plaintiff was entitled to injunctive relief.

The central legal issues before the court were whether the defendant's exercise of the right of re-entry was justified and whether the plaintiff had a serious question to be tried concerning the breach of the lease. The court had to consider the plaintiff's contention that the notice of breach of covenant was invalid or that there was no actual breach, and whether the defendant's actions were warranted. Additionally, the court needed to assess the applicability of discretionary considerations that might affect the granting of injunctive relief.

The court found that there was indeed a serious question to be tried regarding the breach of the lease, as the plaintiff had presented a plausible argument contesting the notice of breach. The court also noted that no discretionary considerations were raised that would warrant withholding injunctive relief. Consequently, the court granted the plaintiff's application for injunctive relief, preventing the defendant from exercising the right of re-entry until the underlying issues were resolved. The court's decision underscored the importance of addressing serious questions in lease disputes and the potential consequences of failing to comply with notices of breach.

Orders