Woolworths Group Ltd v Gazcorp Pty Ltd

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.