Wormald Australia Pty Limited v G R Mailman & Associates Pty Limited

Wormald Australia Pty Limited (the applicant) sought special leave to appeal from a decision of the Court of Appeal concerning a rent review clause in a commercial lease. The dispute arose when the lessor served a notice to increase the rent significantly, and the lessee failed to dispute the notice within the stipulated 14-day period. The lessee subsequently sought to have an independent determination of the market rent and to compel the lessor to initiate the valuation process.

The High Court was required to determine the legal effect of the lessee's failure to dispute the rent increase notice within the time prescribed by the lease. Specifically, the court needed to consider whether the deeming provision, which stated that the lessee was deemed to have agreed to the lessor's proposed rent if no dispute notice was served, was conclusive, or if the lessee could still challenge the rent determination process. The court also had to consider the application of principles derived from the House of Lords decision in *United Scientific* to the construction of such rent review clauses.

The court noted that the courts below had differing views on the interpretation of the rent review clause, particularly regarding the effect of the deeming provision. While the initial approach at first instance favoured requiring the valuation procedure to proceed, the Court of Appeal reached an opposite conclusion. The applicant argued that the trend in English law, which was acknowledged by the courts below, was to treat deeming provisions in rent review clauses as not being entirely conclusive, suggesting that the essence of the deeming provision itself could be a matter for determination.