Woolworths Group Ltd v Gazcorp Pty Ltd

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Court of Appeal


Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: Woolworths Group Ltd v Gazcorp Pty Ltd [2022] NSWCA 19
Hearing dates: 18 November 2021
Date of orders: 22 February 2022
Decision date: 22 February 2022
Before: Bathurst CJ at [1];
Bell P at [2];
Meagher JA at [231]
Decision:

Appeal dismissed with costs

Catchwords:

CONTRACTS – termination – abandonment – agreement for lease executed in 2008 – period of years during which landlord did not perform works under the agreement – performance by landlord not insisted upon during this period – where certain rights under the agreement for lease expired during this period – where development consent allowing for project contemplated by agreement was due to lapse in February 2014 – where parties made no specific reference to agreement after April 2012 – whether agreement was abandoned

CONTRACTS – termination – frustration – agreement for lease – where landlord agreed to carry out works to construct shopping centre and to grant lease of part of shopping centre to tenant – development consent obtained – where parties contemplated incorporation of department store into shopping centre – where development application for incorporation of department store refused – whether agreement for lease was varied to incorporate plans for department store

CONTRACTS – termination – frustration – agreement for lease – landlord to perform works for construction of shopping centre development – where those works were authorised by and subject to a development consent obtained in 2008 – where parties operated under common assumption that landlord would be able to carry out works lawfully in accordance with development consent – neither party responsible under agreement for maintaining that state of affairs – development consent lapsed in 2014 prior to commencement of works – works subsequently unable to be performed lawfully – whether agreement frustrated – whether lapse of development consent resulted in a “radical difference” in circumstances of performance – whether landlord responsible for lapse of development consent

LEASES AND TENANCIES – default and termination – abandonment – agreement for lease executed in 2008 – period of years during which landlord did not perform works under the agreement – where performance not insisted upon – where certain rights under the agreement expired during this period – where development consent allowing for project contemplated by agreement was due to lapse in February 2014 – where parties made no specific reference to agreement after April 2012 – whether agreement was abandoned – whether by conduct and correspondence parties mutually intended that contract was not to be performed

Legislation Cited:

Environmental Planning and Assessment Act 1979 (NSW) s 96

Sydney Local Environmental Plan 2012 cl 7.23

Cases Cited:

Albert D Gaon & Co v Société Interprofessionelle des Oleagineux Fluides Alimentaires [1960] 2 QB 318

Bondi Beach Astra Retirement Village Pty Ltd v Gora (2011) 82 NSWLR 665; [2011] NSWCA 396

Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61

Chinatex (Australia) Pty Limited v Bindaree Beef…

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Details
Case
[2022] NSWCA 19
Decision Date

CaseChat Overview and Summary

Woolworths Group Ltd appealed from a decision of the primary judge concerning an agreement for a lease entered into in 2008 between Woolworths (as landlord) and Gazcorp Pty Ltd (as tenant). The dispute centred on whether the agreement had been abandoned or frustrated. The Court of Appeal was required to determine if the parties, by their conduct and correspondence over several years, had mutually intended that the contract was not to be performed, or if the agreement had been frustrated by unforeseen circumstances.

The legal issues before the Court of Appeal included whether the agreement for lease was abandoned by the parties' conduct, particularly given the landlord's failure to perform works for an extended period, the expiry of certain rights under the agreement, and the parties' lack of specific reference to the agreement after April 2012. Additionally, the court had to consider whether the agreement was frustrated by the lapse of the development consent in February 2014, which rendered the contemplated works unable to be performed lawfully, and whether the landlord was responsible for this lapse. The court also considered whether the agreement had been varied to incorporate plans for a department store, and if the refusal of a development application for such a store constituted frustration.

The Court of Appeal reasoned that the primary judge had correctly found that the agreement had not been abandoned. The court held that the parties' conduct, including the landlord's prolonged inaction and the tenant's lack of insistence on performance, did not demonstrate a mutual intention to abandon the contract. Regarding frustration, the court found that the lapse of the development consent did not result in a "radical difference" in the circumstances of performance such that the contract was frustrated. The court determined that the landlord was not responsible for the lapse of the development consent, as the agreement did not impose an obligation on the landlord to maintain the consent. The court also found that the agreement had not been varied to incorporate the department store plans.

The appeal was dismissed with costs.

Orders

Orders of the court

Appeal dismissed with costs

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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