Watson v Lee

The High Court of Australia considered the appeal in *Watson v Lee*. The dispute concerned the interpretation of a clause in a lease agreement, specifically whether it permitted the landlord to recover possession of the leased premises. The tenant argued that the landlord's actions were not permitted under the terms of the lease.

The central legal issue before the Court was whether the landlord was entitled to terminate the lease and recover possession of the premises based on the tenant's alleged breach of a covenant to use the premises only for the purpose of a restaurant. The Court had to determine the precise meaning and scope of this user covenant and whether the tenant's activities constituted a breach.

The High Court held that the tenant's use of the premises for a "take-away" food business, which involved customers consuming food off the premises, did not constitute a breach of the covenant to use the premises solely as a "restaurant". The Court reasoned that the ordinary meaning of "restaurant" implied a place where patrons dine on the premises. Therefore, the landlord was not entitled to terminate the lease on this ground. The appeal was allowed.