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Bargain World CQ (Rockhampton) Pty Ltd v AHC Limited[2023] QSC 201

Bargain World CQ (Rockhampton) Pty Ltd v AHC Limited[2023] QSC 201

SUPREME COURT OF QUEENSLAND

CITATION:

Bargain World CQ (Rockhampton) Pty Ltd v AHC Limited [2023] QSC 201

PARTIES:

BARGAIN WORLD CQ (ROCKHAMPTON) PTY LTD

(Applicant)

v

AHC LIMITED

(Respondent)

FILE NO/S:

BS 8320 of 2023

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

5 September 2023

DELIVERED AT:

Brisbane

HEARING DATE:

10 August 2023

JUDGE:

Sullivan J

ORDER:

  1. The respondent is obliged under the Lease to grant the applicant a lease of the Premises for a term of 5 years commencing on 19 July 2023, subject to the same covenants and conditions as are contained in the Lease (“Further Lease”).
  2. The respondent deliver up to the applicant executed copies of the documents necessary to register the Further Lease in the form which are attached to the draft order as Annexure “A”.
  3. The respondent pay the applicant’s costs of the proceeding.

CATCHWORDS:

INTERPRETATION – GENERAL RULES OF CONSTRUCTION OF INSTRUMENTS – COMMERCIAL AND BUSINESS TRANSACTIONS – PARTICULAR TRANSACTIONS – LEASES – where the applicant seeks a declaration that it validly exercised the first of its options to renew contained in the original Lease – whether on the proper construction of a provision in the Lease the grant of the Lease was subject to an obligation on each of the named guarantors to execute an appropriate document – whether on the proper construction of a provision in the Lease the lessor had to require the relevant guarantors to execute an appropriate document prior to the commencement date of any renewed Lease

Corporations Act 2001 (Cth), s 127

AFC Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985, cited

Australian Broadcasting Commission v Australasian Performing Right Association Ltd  (1973) 129 CLR 99, cited

Beaufort Developments (Nl) Ltd v GilbertAsh Nl Ltd [1999] 1 AC 266, cited

Dovuro Pty Ltd v Wilkins [2000] FCA 1902, cited

Dryden Construction Co Ltd v New Zealand Insurance Co Ltd [1959] NZLR 1336, cited

Electricity Generating Corporation v Woodside Energy Ltd (2014) 251 CLR 640, considered

HP Mercantile Pty Ltd v Hartnett  [2016] NSWCA 342, cited 

LCA Marrickville Pty Ltd v Swiss Re International SE (2022) 290 FCR 435, considered

Mt Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, considered

North v Marina [2003] NSWSC 64, cited

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, cited

Re Sigma Finance Corp [2009] UKSC 2, cited

Re Strand Music Hall Co Ltd; Ex parte European and American Finance Co Ltd (1865) 35 Beav 153, cited

Tripple A Pty Ltd v WIN Television Qld Pty Ltd [2018] QCA 246, cited

Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522, cited

XL Insurance Co SE v BNY Trust Company of Australia Limited [2019] NSWCA 215, considered

COUNSEL:

JP Hastie for the applicant

NJ Derrington for the respondent

SOLICITORS:

Macpherson Kelley for the applicant

Hopgood Ganim for the respondent

Introduction

  1. [1]
    The current proceeding was instituted pursuant to an originating application.  The applicant was the lessee of a lease dated 19 April 2018 (the “Original Lease”)[1] and the respondent was the lessor.
  1. [2]
    The applicant seeks a declaration that on 12 April 2023 it validly exercised the first of its options to renew contained in the Original Lease.  It further seeks a declaration that, upon the valid exercise of that option, the respondent was obliged under clause 2.1(b) of the Original Lease to grant the applicant a further lease of the relevant premises for a term of five years, commencing on 19 July 2023, to be subject to the same covenants and conditions as contained in the Original Lease, with appropriate amendments.
  1. [3]
    At the commencement of the hearing, I sought to identify with the aid of the parties what the issues were for determination in the proceeding.  In short, they are as follows:
    1. First, whether on the proper construction of clause 2.3 of the Original Lease, the grant of the further lease was subject to an obligation on the lessee to have each of the named guarantors execute (if required) an appropriate document.
  1. Secondly, on the assumption that the first issue is answered in the affirmative, whether on the proper construction of clause 2.3, did the lessor have to require the relevant guarantors to execute an appropriate document prior to the commencement date of any renewed lease, being 19 July 2023.  If the answer to this question is in the affirmative, then factually did the lessor in this case require the execution of an appropriate document prior to that relevant date.
  1. [4]
    Having identified the two issues in the case, I also sought to clarify what was not in issue in the proceeding.
  1. [5]
    Both parties by their representatives identified that it was not in dispute that the relevant guarantee and indemnity provisions contained within the Schedule to the Original Lease were continuing guarantee and indemnity obligations not only for the Original Lease but, inter alia, for any further lease arising from a valid exercise of an option to renew contained in clause 2.1 of the Original Lease.  This was so by operation of clauses 2.3 and 2.14 of the Original Lease.
  1. [6]
    Both parties by their legal representatives also identified that it was not in dispute that a right existed in the lessor to require the execution of an appropriate document by the guarantors.  Both parties agreed that the right was to be found in clauses 2.3 and 2.14.  Counsel for the respondent contended that the right was one which was vested in the lessor against the lessee, in the sense that it was the lessee who was required to have the guarantor execute the appropriate document.  Counsel for the applicant contended the right was vested in the lessor directly against the guarantors, in the sense of a direct legal obligation being imposed on the guarantor to execute the appropriate document.
  1. [7]
    I will now turn to the relevant facts involved in this case.

Facts

  1. [8]
    The Original Lease was registered on 31 October 2018.  It had an initial five year term with two five year options.  Whilst dated 19 April 2018, the term of the Original Lease did not commence until 19 July 2018 and accordingly ended on 18 July 2023. 
  2. [9]
    At the time the Original Lease was executed, the applicant had two directors, a Mr Prajapati and a Mr Patel.  Each of them were named as guarantors in the Reference Schedule which formed part of the larger Schedule to the Original Lease.[2]
  3. [10]
    During the initial term of the Original Lease, a dispute arose between the two directors.  Mr Prajapati purchased Mr Patel’s shares in the applicant in late 2021.  Mr Patel ceased to be a director of the applicant on or about 22 December 2021.  At the time Mr Patel ceased his directorship, no release was sought or obtained in respect of Mr Patel’s obligations and liabilities as a guarantor under the Original Lease.
  4. [11]
    Subsequent to that time, but still within the initial term of the Original Lease, Mr Patel started to demand that the respondent release him as a guarantor of the Original Lease. 
  5. [12]
    By 27 January 2022, solicitors for the respondent had written to the solicitors for Mr Patel informing him that he remained a guarantor under the Original Lease.
  6. [13]
    On 12 April 2023, the applicant, by its then solicitors, gave notice under clause 2.1(b) of the Original Lease that the applicant exercised the option to take a further five year lease (“Option Notice”).  There is no dispute that the Option Notice was properly given by the applicant.
  7. [14]
    On 28 April 2023, solicitors for the respondent wrote to solicitors for the applicant about the exercise of the option, and inter alia, queries about the market rent review at option.  As part of the statements in that letter, the following appeared:

“…Lastly, we advise that any amendments to the Lease required to give effect to your client’s exercise of option will be required to be signed by your client as the Lessee, as well as by both current guarantors to the Lease, Rakeshkumar Patel and Rajubhai Navinchadra Prajapati.

Please seek your client’s instructions and revert to our office as a matter of urgency so that all outstanding issues can be resolved.”

  1. [15]
    On 13 May 2023, Mr Patel wrote to a representative of the respondent by email under the subject matter “Personal Guarantee withdrawn-CQ Bargain World”.  It referred to his having previously informed the respondent on many occasions that he wanted to withdraw his personal guarantee in respect of the Original Lease but had not received any response or communication regarding the matter.  He then stated:

“I here by want to inform concerned authorities that I Will be no longer held liable for any damages caused by Leased of CQ Bargain world at Parkhurst town centre and withdraw my personnel (sic) guarantee from the Lease and held no longer liable for any damage caused by the breach / discontinued or renewals of its Lease agreements.

As I have personally informed Rod and Victor about the change of ownership, No steps are taken to ensure that my personal guarantee on the Lease will gets removed.

I here by request landlord of CQ Bargain World to take necessary measures to ensure that this change of ownership will get acknowledged and My personal guarantee from Lease will get removed and confirmation of the same will be issued.”

  1. [16]
    On 16 May 2023, the solicitors for the respondent sent a letter to Mr Patel which stated, inter alia, as follows:

“…Our client maintains its position and will not agree to release you from your personal guarantee.  Accordingly, you will be expected to sign any documentation required to extend the Lease for a further term, noting that the Lessee is seeking to exercise its first five (5) year option.

Alternatively, if you do not authorise the exercise of the Option then the Lease will likely be at an end.  Should the Lease come to an end you will be released from any further obligations under the Lease.

Further, should our client and the Lessee agree to new terms and a new Lease our client would release you from your obligations under the current Lease.”

  1. [17]
    A Mr Rod Macleod, a director of the respondent, deposed in his 21 July 2023 affidavit that, on 17 May 2023, he participated in a Teams meeting which included a Mr Sabados on behalf of the respondent, and Mr Prajapati and his wife on behalf of the applicant.  At that meeting, Mr Macleod said words to the effect that, “…without Mr Patel continuing as a guarantor, our view was that the option under the Lease could not be legally renewed…  Mr Patel wants no further involvement given that he is no longer a director of Bargain World.”  Mr Prajapati made no comment in response to that statement.
  2. [18]
    It should be noted that Mr Prajapati had sworn an earlier affidavit on 6 July 2023 in which he made the statement that at no time had the respondent:

“(a)  communicated with the Applicant that it required execution of any additional documents in response to it exercising the First Option or present[ed] it with copies of such additional documents for consideration;

  1. informed the Applicant that it was communicating with its former director and continuing guarantor Mr Patel;
  1. informed the Applicant that it received or granted a request from Mr Patel to be released from its obligation as continuing guarantor under the Lease.”
  1. [19]
    Mr Prajapati did not swear a subsequent affidavit disputing the contents of what had been deposed to by Mr Macleod in relation to the Teams meeting on 17 May 2023.  No cross-examination occurred at the hearing.  To the extent the statement by Mr Prajapati in his earlier affidavit is inconsistent with Mr Macleod’s version, in the absence of Mr Prajapati dealing with its later and more specific content, I accept Mr Macleod’s version on this issue. Further, the statement in paragraph [18](a) above is inconsistent with the content of the letter of 28 April 2023 which was a communication on behalf of the respondent to the applicant that required all the guarantors to sign any amendments to the Lease required to give effect to the exercise of the option.  Such a document as described would have fallen within the meaning of an “appropriate document” within clause 2.3 of the Original Lease.
  2. [20]
    On 20 June 2023, solicitors for the respondent sent to the applicant two letters, one of which included an attached Notice of Termination of the Lease.  One of the letters stated, inter alia, as follows:

“As stated in the notice our client does not accept your exercise of option on the basis that one of the Guarantors does not agree to provide a guarantee of the Lessee’s obligations under the Lease for a further term.  You will note that clauses 2.3 and 21.14 of the Lease provide that the exercise of the option is subject to the continuing guarantee of the Guarantors.

Accordingly, the Lease will be at an end on 18 July 2023 and you will be required to vacate the Premises by that date.”

  1. [21]
    The Notice of Termination itself included the following statement:

“We note that, pursuant to clauses 2.3 and 21.14 of the Lease, the exercise of the option is subject to the Guarantors continuing to guarantee the Lessee’s obligations under the further Lease.  We note that one of the Guarantors, Rakeshkumar Patel, does not agree to continue to provide his guarantee.”

  1. [22]
    On 23 June 2023, the solicitors for the applicant wrote to the solicitors for the respondent, disputing the notice to terminate.  That letter articulated some of the arguments canvassed in the hearing.  This included that the condition contained in clauses 2.3 and 21.14 had been met by the existence of a continuing guarantee.  It also included a statement that there had been no request of the applicant to have existing guarantors execute an appropriate document, in any event.
  2. [23]
    On 30 June 2023, the solicitors for the applicant wrote to the solicitors for the respondent maintaining the applicant’s position.  It contained a number of arguments, some of which have not been advanced in this hearing.  It, in part, contained a statement which seemed to assume that the continuing guarantee obligations in respect of Mr Patel would not be continuing for a renewal if Mr Patel advised expressly that the guarantee would not continue. The letter, in part, stated:

“…

  1. The deeming provision would only have come into effect, and the guarantors’ guarantees “deemed” to have continued, had Rakeshkumar Patel not expressly advised the Lessor that his guarantee would not continue. 
  1. Further, had it have been the intention that the guarantees provided automatically covered the original Term and any extended term the Lease would have expressly stated this.  Both clauses 2.3 and 21.14 suggest a contrary intention. 
  1. Our client has not provided your client with either a Lessor Disclosure Statement as ordinarily required by section 21E of the Retail Shop Leases Act, or an “appropriate document” for execution to extend the Lease, as our client does not accept your client’s exercise of the option as explained above.

…”

  1. [24]
    At 4.28 pm on 30 June 2023, it seems that the solicitors for the respondent forwarded Mr Patel’s email of 13 May 2023 to the solicitors for the applicant.
  2. [25]
    On 30 June 2023 at 4.38 pm, the solicitors for the applicant responded to the solicitor for the respondent by email as follows:

“Pursuant to the email Rakesh seeks your client to release him from the Guarantee.  Your client did not ask him to sign another guarantee and for the reasons explained in our letter was under no obligation to do so.

Can you please provide your client’s response to Rakesh’s request pursuant to which they agreed to the (sic) release him from the guarantee.”

  1. [26]
    The material does not exhibit any further written communication between the applicant and the respondent before 19 July 2023.
  2. [27]
    However, on 14 July 2023, undertakings were provided, as recorded in a consent order entered into between the parties, which had the effect of allowing the applicant to remain in the premises on a temporary basis pending final determination of the dispute by this Court.

Lease terms

  1. [28]
    The structure of the Original Lease is as follows.  It is a document numbered pages 1 through to 54.  Page 1 is the Form 7 Land Title form for a lease.  It contains particulars of the essential terms, such as the lessor and lessee, description and interest of the property leased, term and option periods.  It also provides that the Lease is subject to the covenants and conditions contained in an attached Schedule.  That Schedule is also identified as containing the rental.  The Form 7 is executed by the lessor and lessee only.
  2. [29]
    Pages 2 to 54 is a Form 20 Land Title form.  This Form 20 contains a number of documents, namely:
    1. a set of covenants and conditions;
    2. an Annexure “A”;
    3. a Reference Schedule;
    4. a Guarantor’s signature page executed by each guarantor; and
    5. a plan of the leased area.
  3. [30]
    Turning then to the covenant and conditions, clause 1 provided primary definitions as follows:

“1.  INTERPRETATION

1.1 Definitions

In this Lease unless the context requires otherwise, these terms have the following meanings:

…

Guarantor means the person named in Item 12 of the Reference Schedule as guarantor and includes his, her or their executors, administrators, successors and assigns and every two or more of them jointly and severally.

…

Lease means and includes the document in Form 7 and all schedules, appendices and annexures to that document.

…

Headings

Headings do not affect the interpretation of this Lease.

…”

  1. [31]
    The Original Lease contained, inter alia, an option for a further five year term.  It is not in dispute that the applicant was entitled to, and did, exercise that option on 12 April 2023 in accordance with clause 2.1 of the covenants and conditions.  Clause 2.1 relevantly provides as follows:

“2.1 First Option of Renewal

If:

(a)  the Lessee shall desire to take a lease of the Premises for the First Option term described in Item 4(a) of the Reference Schedule; and

…

  1. on the date on which such notice is given and on the last day of the then current term the Lessee has complied within a reasaonble time specified in any notice from the Lessor requiring the Lessee to remedy a breach of any of the covenants provisions and conditions contained herein and on the part of the Lessee to be performed and observed then the Lessor will grant to the Lessee a lease for the First Option term upon and subject to the same coveants and conditions as are contained in this Lease, except as regards the option granted in this clause in respect of the relevant term, at an annual rent for the first year to be determined in accordance with Clause 3.3(c) hereof.

…

  1. at least two (2) months, but not longer than 6 months before the first option date, the Lessor must give the Lessee written notice of the first option date.”
  1. [32]
    The obligation on the lessor to grant the lessee a further lease was conditional.  Clause 2.3 provides as follows:

“2.3 Continuing Guarantee

If the Lessee exercises any option to renew contained in this Lease, (or, despite the non-exercise of such option, the Lessor and the Lessee renew this Lease for a further term equivalent to the relevant option period or the Lessee continues to hold over pursuant to Clause 2.4), the Lessor’s obligation to grant such a Lease shall be subject to the Guarantor guaranteeing the Lessee’s obligations under the further Lease and indemnifying the Lessor in respect of the further Lease or holding over period in the terms of the guarantee and indemnities contained in this Lease (which shall automatically be deemed to extend to such further Lease or to such holding over period, despite the Lessor’s right under this Lease to require execution of an appropriate document).  If the Guarantor or any of them has died or become mentally ill or bankrupt during the term of this Lease, the grant of any such further Lease or consent to such holding over period shall also be subject to, if the Lessor so requires, the Lessor accepting a suitable substitute guarantor.” (Underlining added)

  1. [33]
    The proper interpretation of the underlined portion of clause 2.3 is one of the critical issues in this proceeding. 
  2. [34]
    The terms of the “guarantee and indemnities” referred to in clause 2.3 are contained in clause 21 of the Lease which is headed “GUARANTEE AND INDEMNITY”.  The “Guarantor” was each of the applicant, Mr Prajapati and Mr Patel pursuant to clause 1.1 of the Lease and item 12 of the Reference Schedule.  Why the applicant was named as a guarantor when it was the lessee is not apparent. 
  3. [35]
    The various liabilities of the guarantors were contained in a number of clauses, such as clause 21.2 in the form of a guarantee obligation, clause 21.3 in the form of an indemnity obligation, and clause 21.5 in the form of a principal liability obligation by designating the guarantor a primary debtor and contractor.
  4. [36]
    Clause 21.12 dealt in part with the immediate operation of the guarantee.  However, in its second sentence it provided a separate secondary definition of the term “this Lease”.  It is an inclusive definition, but appears to extend the meaning of “this Lease” beyond the primary definition of “Lease” in clause 1.1.  It is in the following terms:

“21.12 When Guarantee is effective

This guarantee and indemnity takes effect immediately upon its execution and continues to be of full effect whether or not the Lease is subsequently registered in the Department of Natural Resources and Mines.  References to “this Lease” include any equitable Lease, agreement for Lease or periodic tenancy arising upon execution or acceptance by the Lessee of the instrument to which guarantee and indemnity is annexed and includes every renewal, extension and variation of the Lease and of every Lease agreed to be assigned or to be granted.”

  1. [37]
    Clause 21.14 is of a broadly similar effect to clause 2.3.  It is relevant to note that there are differences.  One is that the words “under the Lease” as they appear in the bracketed part of clause 2.3 do not appear in this clause.  Further, clause 2.3 also expressly operates in relation to “holding over”, whilst clause 21.14 makes no express mention of holding over.  Another is the use of “this Lease” in clause 21.14 which will call up the secondary definition from clause 21.12.  It is in the following terms:

“21.14 Continuing Guarantee

If this Lease contains an option for a further Lease and the Lessee exercises such option (or, despite the non-exercise of such option, the Lessor and the Lessee renew this Lease for a further term) the Lessor’s obligation to grant such a Lease shall be subject to the Guarantor guaranteeing the Lessee’s obligations under the further Lease and indemnifying the Lessor in respect of the further Lease in the terms of the guarantee and indemnities contained in this clause (which shall automatically be deemed to extend to such further Lease, despite the Lessor’s right to require execution of an appropriate document).  If the Guarantor or any of them has died or become mentally ill or bankrupt during the term of this Lease the grant of any such further Lease shall also be subject to, if the Lessor so requires, the Lessor accepting a suitable substitute guarantor.”

  1. [38]
    Clause 21.17 deals with the guarantor’s obligations in relation to security interests in property.  It provides in part as follows:

“21.17 Security Interest

  1. The Guarantor hereby charges all their beneficial interests in any land, held now or in the future by the Guarantor or any related party of the Guarantor, with the obligations secured by this Guarantee.  If demand is made upon the Guarantor by the Lessor, the Guarantor will immediately execute a mortgage or other instruments of security, as required by the Lessor.”

Construction Principles

  1. [39]
    There seems to be no real controversy between the parties as to the principles applicable to the construction of the Original Lease in this proceeding.
  2. [40]
    A lease is a commercial agreement and falls to be construed having regard to the familiar principles which apply to commercial contracts.  An authoritative statement of the correct approach to the construction of commercial agreements may be found in Mt Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd[3] where French CJ, Nettle and Gordon JJ observed that:[4]

“In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean.  That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract…

Other principles are relevant in the construction of commercial contracts.  Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption ‘that the parties…intended to produce a commercial result’.  Put another way, a commercial contract should be construed so as to avoid it ‘making a commercial nonsense or working commercial inconvenience’.” (Footnotes omitted)

  1. [41]
    The commercial purpose or objectives which are to be secured by a commercial contract may, as the High Court previously explained in Electricity Generating Corporation v Woodside Energy Ltd, be defined by reference to, “…the genesis of the transaction, the background, the context [and] the market in which the parties are operating”.[5]
  2. [42]
    The different parts of an agreement should be read together.[6]  It was recently observed by Derrington and Colvin JJ (Moshinsky J agreeing) in LCA Marrickville Pty Ltd v Swiss Re International SE[7] that:

‘It is often identified as “trite law” that the duty of a court when construing a document is to discover its meaning by considering it “as a whole”: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109 per Gibbs J.  The rationale is, as Gibbs J observed, that “the meaning of any one part of it may be revealed by other parts” and, as a corollary, “the words of every clause must if possible be construed so as to render them all harmonious one with another”.  In Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522 (Wilkie v Gordian Runoff), a majority of the High Court observed that in construing a policy of insurance, as with other instruments, “preference is given to a construction supplying a congruent operation to the various components of the whole”:  at 529 [16] citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 – 382 [69] – [71].  Necessarily, the identification of that construction can only be achieved by ascertaining how a contract or policy might operate as affected by each of the competing interpretations.  This “iterative process”, involving “checking each of the rival meanings against the other provisions of the document and investigating its commercial consequences”, “enables a court to assess whether either party’s preferred legal meaning gives rise to a result that is more or less internally consistent and avoids commercial absurdity”:  HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 342 [134] quoting Re Sigma Finance Corp [2009] UKSC 2 [12].’

  1. [43]
    In XL Insurance Co SE v BNY Trust Company of Australia Limited [2019] NSWCA 215 Gleeson JA at [72] (with whom Bell P at [1] and Emmett AJA at [131] agreed) approved of the following statement concerning the issue of redundancy of words when construing a contract:

‘The applicable principles with respect to redundancy of words in a contract were summarised by Ball J in AFC Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985; (2010) 15 BPR 28, 199 at [13], as follows:

“The general principle is that the words of a contract should be interpreted in a way which gives them an effect rather than a way in which makes them redundant: North v Marina [2003] NSWSC 64 at [45]; Dovuro Pty Ltd v Wilkins [2000] FCA 1902; (2000) 105 FCR 476 at [152], [230].  That principle does not operate as an invariable rule.  In some cases, it may be appropriate to interpret words in a way that makes them redundant.  That may be appropriate where the alternative construction of the words is inconsistent with other provisions of the contract or where the alternative construction is inconsistent with the commercial purpose of the contract or where it appears that the words have been included out of abundant caution: see Re Strand Music Hall Co Ltd; Ex parte European and American Finance Co Ltd (1865) 35 Beav 153 at 159; 55 ER 853 at 856 per Sir John Romilly MR; Dryden Construction Co Ltd v New Zealand Insurance Co Ltd [1959] NZLR 1336; Beaufort Developments (Nl) Ltd v GilbertAsh Nl Ltd [1999] 1 AC 266 at 273-4 per Lord Hoffmann.”’

  1. [44]
    In the context of what is required to exercise an option to renew a lease, it is trite that the obligations on the lessee must be complied with strictly.[8]

Applicant’s Contentions

  1. [45]
    The applicant’s submissions were to the following effect.
  2. [46]
    First, clause 2.3 qualified the respondent’s obligation to grant a further lease to the applicant upon the exercise of the option.  It did so by making the grant conditional on the guarantors guaranteeing the applicant’s obligations under the further lease and indemnifying the respondent in respect of the further lease.
  3. [47]
    In that respect, clause 2.3 provided (together with clauses 21.12 and 21.14) that the guarantee and indemnity which each of the guarantors had previously provided and executed extended to any further lease arising from an exercise of an option to renew.  The condition was satisfied at the end of the initial term of the Original Lease because of the effect of the continuing guarantee and indemnity, absent its discharge or operational impairment.
  4. [48]
    Secondly, it was submitted that the words which appeared in the bracketed portions of clause 2.3 “(…, despite the Lessor’s right under this Lease to require execution of an appropriate document)” do not form part of the required condition.  The condition was only that the guarantors guarantee “…the Lessee’s obligations under the further Lease…” and indemnify “…the Lessor in respect of the further Lease…”.  That was again said to be satisfied by reason of the existing and continuing guarantee and indemnity.
  5. [49]
    Thirdly, if the respondent’s obligation to grant a further lease was intended to be qualified by the obligation to execute an “appropriate document”, clauses 2.3 and 21.14 could have said so in clear terms.  The more natural language which the parties would have been expected to use to achieve that purpose would have been words to the effect that the “…Lessor’s obligation to grant such a Lease shall be subject to the Guarantor executing an appropriate document”, if required by the lessor.
  6. [50]
    Fourthly, the words as they appear in the bracketed portion of clause 2.3, “…, despite the Lessor’s right under this Lease to require execution of an appropriate document”, do no more than signify that the respondent has the right under the Lease to require the guarantors to execute a formal document referring to the further lease.  Such a right was not part of the required condition and did not, therefore, qualify the respondent’s obligation to grant a further lease.
  7. [51]
    Fifthly, there was nothing unexpected or uncommercial in the suggested construction.  The guarantee was separate and independent to the lease of the property.  What clauses 2.3 and 21.14 contemplated by the requirement to execute an appropriate document was a right which the respondent had against the guarantors as opposed to the lessee.  If one of the guarantors refused to execute an appropriate document, that would be a breach of that guarantor’s obligations to the respondent.  The respondent could, if it saw fit, take action against that guarantor to compel him or her to execute an appropriate document.  As part of this submission, it was said that the utility of doing so would be questionable given that execution of a further document was unnecessary in order for the guarantors to be bound.
  8. [52]
    Sixthly, and as an alternative submission, even if the right to require the execution of an appropriate document did form part of the required condition, that was only so if the respondent actually required the guarantors to execute a formal document before the time for the grant of the further lease.
  9. [53]
    If the respondent did not choose to exercise that right before the date for the grant of the further lease, it could not rely upon any failure by the guarantors to execute an appropriate document to avoid its obligation to grant a further lease to the applicant.    It was submitted that no appropriate document had been produced prior to the relevant date with a request for its execution by the guarantors. 

Respondent’s Contentions

  1. [54]
    The respondent contended that part of the required condition for a grant of a lease was that the guarantors had to execute an appropriate document if required to do so by the respondent.  In support of that contention the respondent advanced the following submissions.
  2. [55]
    First, the words in brackets within clause 2.3 sought to modify or in some way explain the required condition which must be satisfied in order for the respondent to have an obligation to grant a further Lease.  Clause 2.3 was the source of the right to require the execution of an appropriate document.
  3. [56]
    It was submitted that this was the necessary starting point for the question, “what is the true scope of the condition to which the grant of the further lease is subject?”.  The submission contended that the answer to that question must be that the words from the brackets, “…, despite the Lessor’s right under this Lease to require execution of an appropriate document”, have multiple purposes in explaining the condition “subject to the Guarantor guaranteeing the Lessee’s obligations”. 
  4. [57]
    The purposes were articulated as follows:
    1. First, the words confer the right as described;
    2. Secondly, those words, given that they appear within the brackets that qualify the words, “the Lessor’s obligation to grant such a Lease shall be subject to the Guarantor guaranteeing the Lessee’s obligations under the further Lease”, must be understood to form part of the condition for the grant of the further Lease because if it were otherwise, the words, “despite the Lessor’s right under this Lease to require execution of an appropriate document” would have no work to do in the clause; and
    3. Thirdly, by using the word “despite” at the beginning of the subclause, the words ensure that, although they confer on the lessor the right to obtain an appropriately executed document from the guarantors, the conferral of that right does not prejudice the lessor’s ability to have recourse to the guarantors if there is a period of holding over or, for whatever reason, the lessor does not insist upon the execution of such a document.
  5. [58]
    It was then submitted in respect of the applicant’s argument that more natural language could have been used to make the execution of an appropriate document part of the condition to grant a further lease, that such an argument does not deal with the fact that the drafter was, by including an “automatic” extension of the guarantee, plainly intending to capture a period of holding over, while simultaneously requiring the execution of an appropriate document.  Further, the fact that the drafting could be more clearly drafted in favour of one interpretation did not mean that the said interpretation was not still intended.
  6. [59]
    Thirdly, the applicant’s construction was said to be uncommercial for a party in the position of the respondent.
  7. [60]
    If the option was exercised, a new lease is formed between the lessor and lessee (regardless of whether the option is exercised by amendment to the existing lease or the execution of a fresh lease).[9]  That being the case, if no further document was signed, the respondent would be left to rely (to enforce its guarantee) on clauses 21.12 and 21.14 of the Lease (which is part of the Original Lease which contains the guarantee).
  8. [61]
    The submission continued, that while the rights under clauses 2.12 and 2.14 may be sufficiently certain for the respondent as the original lessor, a commercial lease such as this could be expected to be assigned following a sale of the underlying land.  If a separate appropriate document was required to be executed in favour of the further lease, then it would appear to the potential purchaser to be beyond doubt that the guarantors are bound to guarantee and indemnify the lessor in respect of any further lease.  That is, there would be a more certain “appearance” of enforceable guarantee and indemnity obligations even though it was accepted between the parties that the ultimate legal position would not be any different in terms of enforcement.
  9. [62]
    The respondent contends that on the applicant’s construction, any lessor who takes over a further lease (as assignee) is left in the invidious position, should it seek to enforce the further lease and guarantee for non-payment of:
    1. needing to sue the applicant for breach of the further lease; and
    2. needing to rely upon the terms of clause 2.13[10] of the Origial Lease, notwithstanding that it will never have been a party to that lease.
  1. [63]
    The submission was that this is not a commercial outcome and is a matter that must be taken into account in construing the Original Lease, given that if the applicant’s construction is accepted, the respondent’s position vis-à-vis potential purchasers of the land is affected.
  2. [64]
    Fourthly, in respect of the applicant’s submission that the guarantee needs to be understood as a separate document or agreement to the underlying lease, such that any requirement to execute a further appropriate document must be understood to be a reference to a formal document embodying the terms of the guarantee and indemnity, the respondent contended that such a submission should be rejected.
  3. [65]
    This is said to be so because clause 21, which contains the terms of the guarantee, indicates that it is not a separate agreement or document, but part of the Original Lease.  That is made clear by the text of, at least, clauses 21.1, 21.2, 21.3 and 21.4.  Each refers in varying ways to “this Lease”.
  4. [66]
    Fifthly, it was submitted that the applicant’s proposition that a separate agreement was contemplated by a separate execution page, could not be reconciled with the fact that the relevant page called for the signature of the applicant (as lessee) and did not include a place for the signature of the respondent (as lessor).  The guarantee was not therefore severable from the Lease.  It was part of it and cannot be excised to avoid the consequences of clause 2.3.
  5. [67]
    I have to record here that the separate execution page did not have the applicant signing as lessee.  For some bizarre reason, the applicant was also named as a guarantor in Item 12 to the Reference Schedule.  The signature page at page 53 of 54 of the Form 20 had the applicant evidently signing as a guarantor.
  6. [68]
    Finally, it was submitted that the respondents did not have to produce and then require the guarantors to sign an appropriate document because the former director had unequivocally refused to execute any further guarantee document. 

Consideration

  1. [69]
    I will deal with each of the two identified issues in turn. 

First Issue: Proper Construction of the Condition in Clause 2.3 of the Lease

  1. [70]
    The first issue to be determined is whether on the proper construction of clause 2.3, the grant of a further lease was subject to the existing guarantors executing an “appropriate document”, if required.
  2. [71]
    The starting point for the consideration of this issue is the argument as to whether the guarantee and indemnity is independent and separate from the “Lease” as defined in the covenants and conditions.
  3. [72]
    The short answer is that it is not separate. 
  4. [73]
    Clause 1.1 defines the term “Lease” to mean and include the document in the Form 7 and all schedules, appendices and annexures to that document.  In that respect, unless the context otherwise requires, when the term “Lease” is used in the covenants and conditions, it is a reference to the entirety of those covenants and conditions, including clause 21 which deals with the guarantee and indemnity.  The context does not otherwise require a different construction in clause 2.3.
  5. [74]
    Having said this, it is appropriate to acknowledge that whilst the term “Lease” within the covenants and conditions refers to the totality of the Forms 7 and 20, it is plain that the vast majority of the covenants and conditions within the attached Schedule concern the lessor and the lessee in those particular capacities. 
  6. [75]
    There is a separate execution page, at page 53 of 54 of the Form 20.  This execution page records consideration flowing from the guarantors to the lessor for the granting of the Lease at the guarantors’ request.  In return, the guarantors agree to be bound by the terms of the Lease as a party to such Lease.  The signature clauses for each of the named guarantors, being by way of execution in compliance with s 127 of the Corporations Act 2001 (Cth) for the corporate applicant and being executed as signed, sealed and delivered by the natural person guarantors, are consistent with the executions being intended to be by way of deed.  The existence of express consideration does not preclude the existence of there being a deed.
  7. [76]
    Whilst it is incorrect to say that the guarantee and indemnity do not form part of the “Lease”, it is accurate to say that most parts of clause 21 are only intended to have a legal operation as between the guarantors and lessor.  As with an ordinary commercial contract between multiple parties, the one physical contractual document may have distinctive parts or clauses which are operative only in respect of a subset of the total number of parties to the overall contract.
  1. [77]
    It is then appropriate to look at the structure of clause 2.3 in some detail.
  1. [78]
    First, a clear purpose for the clause is to deal with the conditioning of the circumstances where there may be an extension of the occupancy of the leased premises beyond a particular term.  This includes as a result of the exercise of an option to renew, pursuant to an agreement for a term in respect of a further lease equivalent to the term applicable to an option to renew, or in the circumstances of a holding over pursuant to clause 2.4. 
  1. [79]
    Relevantly, in clause 2.3 the lessor’s obligation to grant a further lease is made subject to at least two conditions.  One appears in the first sentence, and one appears in the second sentence of clause 2.3.
  1. [80]
    In the first sentence, it is expressed this way: “…the Lessor’s obligation to grant such a Lease shall be subject to the Guarantor guaranteeing the Lessee’s obligations under the further Lease and indemnifying the Lessor in respect of the further Lease or holding over period in terms of the guarantee and indemnities contained in this Lease…”.  The reference here to holding over only in the context of the indemnity obligation is awkward.  However, the clause read as a whole indicates that the “guaranteeing” obligation is intended to also cover any holding over period.
  1. [81]
    In the second sentence, the second condition is expressed in the following way: if one or more guarantors have died or become mentally ill or bankrupt during the term of this Lease, the grant of any such further lease or consent to such holding over period “shall also be subject to, if the Lessor so requires, the Lessor accepting a suitable substitute guarantor.”
  1. [82]
    Plainly enough, in relation to this second sentence the phrase, “…if the Lessor so requires” is referring to a requirement imposed on the lessee.  It is clearly not referring to a requirement being imposed on a guarantor to do anything.  In this particular sentence, the guarantor may be dead or mentally ill.
  1. [83]
    Returning then to the first sentence and the condition imposed there.  The most obvious purpose for the condition is that each guarantor must, at the time the grant is to be made, be guaranteeing and indemnifying the lessor in respect of the further lease.  This ensures that in order to have the benefit of the further occupation beyond the original term, the level of guarantor security as contemplated in the Original Lease must be in place and operating for the further lease.
  1. [84]
    What then does the bracketed portion of the first sentence of clause 2.3 do in terms of the overall operation of this part of the clause?
  1. [85]
    The first part of the bracketed portion is the words “…(which shall automatically be deemed to extend to such further Lease or to such holding over period,…”.  Textually, the word “which” as it appears here is a reference to the prior words “in terms of the guarantee and indemnities contained in this Lease”.  There is no dispute between the parties in this proceeding that this first part of the bracketed text has a legally operative function that creates a continuing liability on each of the guarantors in the same terms contained in the guarantee and indemnities found in the Lease, for a new term of a further lease.
  1. [86]
    This legally operative effect is between the lessor and each guarantor.  Thus, it is an example of an operative provision between the lessor and the guarantors which exists outside of clause 21 of the covenants and conditions.  Even though clause 21.14 has a broadly similar operative effect, clause 2.3 has a more extensive operation in at least one area.  That is, it also has an operative effect in respect of holding over periods regulated by clause 2.4.  Even with the more extensive secondary definition of “this Lease” in clause 21.12, clause 21.14 does not appear to regulate holdings over in this way.
  1. [87]
    This first part of the bracketed words is neither explaining what is meant by the preceding condition nor modifying the content of the preceding condition, rather it is providing an operative legal entitlement which will satisfy the condition.
  1. [88]
    Turning then to the second bracketed words said to be relied upon by the respondent in this case, namely “…, despite the Lessor’s right under this Lease to require execution of an appropriate document)…”.  In relation to these words, it had been contended that the reference to “this Lease” does not include clause 21 and thereby points to the right being vested in the lessor against the lessee.  This argument should not be accepted in my view.  As set out above, the definition of “Lease” includes the entirety of the physical document, inclusive of clause 21.  Clause 21.14 contains a similar right, albeit not in respect of holdings over.   
  1. [89]
    Perhaps more pointedly, the first part of the bracketed words is directly concerned with the imposition of an operative legal obligation in favour of the lessor against the guarantor.
  1. [90]
    Given that the first portion of the bracketed words imposes an operative legal obligation against the guarantor apropos the lessor, it is not automatically the case that the second part of the clause should be interpreted as being owed by the lessee to the lessor.  Clause 21.17(a) is an example of a right held by the lessor to have the guarantors execute additional documents, albeit that right is expressly identified as being one imposed on the guarantors.  Accordingly, the proposition that a guarantor may owe an obligation to the lessor to execute another document is not one which could be said to be novel to the Lease if it were ultimately found to exist in clauses 2.3 and 2.14.
  1. [91]
    The next matter to be examined is how the second set of words in the brackets interacts with the first.  The second set of the bracketed words commence after a comma with the word “despite”.  That word “despite” focuses on the prior part of the bracketed words rather than the prior condition. 
  1. [92]
    As stated, the first words in the brackets provide an operative legal obligation in the form of a continuing guarantee and indemnity.  The word “despite” followed by the articulation of the right, naturally communicates both the existence of that additional right, and the fact that its existence does not derogate from the automatic deemed position of there being a continuing guarantee and indemnity.  On the natural reading of the bracketed words as a whole, neither of the sub parts are qualifying, explaining, or modifying the prior condition.
  1. [93]
    From the perspective of a reasonable businessperson, the obvious purpose of the condition is met by there being an identical guarantee and indemnity obligation in operation for the further lease as had been in operation for the prior lease.  This is accompanied by the provision of two contractual entitlements vested in the lessor.  The first is the provision of a continuing guarantee and indemnity.  The second is a right to require the execution of an “appropriate document” in favour of the lessor.  Unlike the second sentence, there is no clear contextual indicator as to who has the burden of the second entitlement owed to the lessor.  
  1. [94]
    On the applicant’s construction, the second words within the bracketed portion of the first sentence are not redundant or otiose.  They separately provide a right in the lessor to require an additional document to be executed.  On the applicant’s construction this is a right against the guarantor. 
  1. [95]
    For the reasons advanced by the respondent, it is possible to contemplate that for matters of practicality, but not substance, the lessor may desire a further guarantee and indemnity to be recorded in an additional document.  However, that is a submission which cuts both ways.  On the applicant’s construction, the right could be exercised at any time after the new grant. This would allow the lessor to request such an appropriate document to be executed if and when the practical need arises.
  1. [96]
    What the natural language of the first sentence of clause 2.3 does not do is articulate that the condition for the grant is the execution by the guarantor of an appropriate document, if required by the lessor, in addition to the deemed continuing guarantee.  The applicant’s construction is one which accords with the natural meaning and is not one which is uncommercial.
  1. [97]
    In circumstances where strict compliance with a clause dealing with an option to renew is imposed on a lessee, there is no obvious explanation as to why an ordinary businessperson would expect to depart from the natural reading of such a clause where that reading also had a commercial operation.
  1. [98]
    Accordingly, I prefer the construction put forward by the applicant and I would answer this issue in the negative, that is, on the proper construction of clause 2.3, the grant of a further lease as a result of an exercise of an option to renew is not conditional on the execution of an appropriate document, if required by the lessor.

Second Issue: Obligation of the Lessor to require execution of an appropriate document

  1. [99]
    The second issue which was to be determined was premised on the basis that the first issue was decided in the affirmative in favour of the respondent.  As I have decided the first issue in the negative in favour of the applicant, it is not strictly necessary for me to decide the second issue.  Nonetheless, I will express my view in relation to the matter.
  2. [100]
    The second issue is whether on the proper construction of clause 2.3 the lessor had to require the execution of an appropriate document prior to the commencement date of any renewed lease, which in this case was 19 July 2023.  Further, if the answer to that question is in the affirmative, then as a matter of fact did the lessor in this case require the execution of an appropriate document prior to the relevant date.
  3. [101]
    The answer to this question must proceed on the assumption that I am incorrect on my construction of clause 2.3 in respect of the first issue.  Accordingly, my view proceeds on the hypothetical basis that it is the respondent’s construction of clause 2.3 advanced on the first issue which is correct.  This includes the respondent’s construction that the right in the first sentence of clause 2.3 is imposed on the lessee, not the guarantor.
  4. [102]
    On that basis, in my view, the first part of the second issue is answered in the affirmative.  I say that for the following reasons. 
  5. [103]
    First, clause 2.1(c) read with clause 2.3 contemplates that the grant of the further lease is to occur on the expiry of the last day of the existing term of the prior lease.  On that basis, where there are discretionary conditions which may be imposed on the obligation to make the grant, the sensible and commercial reading of clauses 2.1(c) and 2.3 is that the exercise of the discretion to impose the conditions should occur before the grant is to be made.  It is an uncommercial construction of clauses 2.1(c) and 2.3 which would allow the discretionary imposition of a condition, say, two years into the five year term of what was understood to be a grant of a further lease. The structure of the exercise of the option pursuant to clause 2.1(e) dictates that the option is to be exercised between the period of six to two months prior to the expiry of the prior term.  Accordingly, there is sufficient time after the giving of the notice to exercise the discretion so as to require the conditions in clause 2.3 to be engaged.
  6. [104]
    The remaining issue then is whether the discretionary condition was engaged as a matter of fact by the lessor requiring the guarantors to execute an appropriate document.  In my view, the answer to this second part of the second issue is that the respondent did so require.  I say this for the following reasons.
  7. [105]
    It can be accepted that prior to 19 July 2023 the respondent did not produce a physical “appropriate document” to the lessee to have the guarantors execute.  Nonetheless, the facts establish that the respondent had communicated to the applicant a requirement for a document to be executed by the guarantors which would have been an “appropriate document” if produced.
  8. [106]
    On 28 April 2023, the respondent in the correspondence between the lessor’s and lessee’s solicitors advised that any amendments to the Lease required to give effect to the lessee’s exercise of the option would be required to be signed by the lessee, as well as both current guarantors to the Lease.  It sought the instructions of the lessee, inter alia, on that matter and requested that the lessee’s solicitor revert to the lessor’s solicitor as a matter of urgency so that all outstanding issues could be resolved.  Such a document would have been similar to the annexure “A” to the order I will make in this proceeding, but with the addition of appropriate execution provisions for the guarantors.
  9. [107]
    On 13 May 2023, Mr Patel made plain that he wanted to withdraw from his existing guarantee and be held no longer liable for any damages caused by any breach of the lease or renewal of the Lease.
  10. [108]
    By 17 May 2023, the applicant’s director was told by the respondent’s director that Mr Patel wanted no further involvement given he was no longer a director, and that without Mr Patel continuing as a guarantor, the applicant’s view was that the option under the Lease could not be legally renewed.
  11. [109]
    By 20 June 2023, the respondent by its solicitors’ letter and attached notice to terminate, communicated to the effect that the Lease was subject to the continuing guarantee of the guarantors, but as Mr Patel did not agree to continue his guarantee, then no continuing guarantee existed for the purpose of a renewal. This was a misconception of the continuing guarantee obligation, but in any event, had to be read in light of the requirement previously communicated.
  12. [110]
    On 23 June 2023, the solicitors for the applicant wrote to the solicitors for the respondent, identifying in part that there had been no request of the applicant to have existing guarantors execute an appropriate document, in any event. This statement cannot stand with and ignores the prior correspondence of 28 April 2023 that communicated that any amendments necessary to give effect to the lessee’s exercise of the option would have to be executed by each of the guarantors.
  13. [111]
    On 30 June 2023, the solicitors for the applicant wrote again.  That communication stated, in effect, that because Mr Patel had advised that his guarantee would no longer continue, clauses 2.3 and 21.14 did not operate to provide a continuing guarantee.  The letter then said:

“…

8. Our client has not provided your client with either a Lessor Disclosure Statement as ordinarily required by s 21(e) of the Retail Shop Leases Act, or an “appropriate document” for execution to extend the Lease, as our client does not accept your client’s exercise of the option as explained above.

…”

  1. [112]
    Whilst poorly worded and operating under a misconception as to the effect of the continuing guarantee obligation in clauses 2.3 and 2.14, the underlying premise was that Mr Patel was refusing to further guarantee the Lease, which included by necessary implication, any further lease. 
  2. [113]
    The evidence supports, and I find, that Mr Patel at all relevant times was refusing to execute any document that would have recorded his guaranteeing and indemnifying of the Lease, including any further lease by a renewal.
  3. [114]
    At no time was the applicant in a position to have a physical “appropriate document” executed by Mr Patel in the form which had been required on 28 April 2023.
  4. [115]
    Accordingly, to the extent there was a requirement owed by the applicant to the respondent to have an “appropriate document” executed by Mr Patel as guarantor, it was not met.  This was so, not because of a failure to produce a physical document that met the description of the required document identified in the 28 April 2023 letter, but more fundamental because the applicant could not have obtained Mr Patel’s agreement to execute any such required document if and when produced.
  5. [116]
    If I were incorrect on my construction of clause 2.3 under the first issue, I would have concluded that it was not necessary for the respondent to have produced and delivered to the applicant a physical “appropriate document” prior to 19 July 2023.  The applicant had failed to obtain the agreement of the existing guarantor to execute a document of the nature that had been required by the respondent on 28 April 2023. Accordingly, the applicant would not have satisfied a condition to the grant that required it to obtain the execution of an “appropriate document” by Mr Patel (if such a condition had existed).

Form of the order

  1. [117]
    I have been provided a copy of a draft order by the parties in a form appropriate to make, if the applicant has succeeded on the application.
  2. [118]
    The draft order with one slight amendment provides, inter alia, as follows:

“The Order of the Court is that:

  1. It is declared that, upon the applicant having validly exercised an option in a written lease between the applicant, as tenant, and the respondent, as landlord, dated 19 April 2018, the respondent was obliged under clause 2.1(b) of the Lease, to grant the applicant a lease of the premises for a term of 5 years commencing on 19 July 2023 and subject to the same covenants and conditions as are contained in the Lease (“Further Lease”).
  2. The respondent deliver up to the applicant executed copies of the documents necessary to register the Further Lease in the form which are attached to the draft order as Annexure A.
  3. The respondent pay the applicant’s costs of the proceeding.”
  1. [119]
    The annexure “A” to the order is a Form 13 Land Title form which, amongst other things, contains the necessary amendments to the Original Lease to give effect to the exercise of the option to renew by the applicant.  I have not sought to reproduce annexure “A” in these reasons.
  2. [120]
    In circumstances where the applicant has succeeded, I make the order in accordance with the draft provided to me, amended as set out above.

Footnotes

[1]  The defined term ‘Original Lease’ is used in contradistinction to the term ‘Lease’ which is a specific defined term in the covenants and conditions of the Original Lease.

[2]  Each of them executed that Lease schedule by specific execution provisions which made plain that they were executing as guarantors and that they agreed to be bound by the terms of the Lease as a party to the Lease.

[3]  (2015) 256 CLR 104.

[4]  (2015) 256 CLR 104 at 116-117.

[5]  (2014) 251 CLR 640 at 656-657.

[6] Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522 at [15] and [16] (Gleeson CJ, McHugh, Gummow and McHugh JJ).

[7]  (2022) 290 FCR 435 at [57].

[8] Tripple A Pty Ltd v WIN Television Qld Pty Ltd [2018] QCA 246 at [46] per Bowskill J (as her Honour then was) with whom the other members of the Court agreed.

[9]  Citing Tripple A Pty Ltd v WIN Television Qld Pty Ltd [2018] QCA 246 at [47] per Bowskill J (as her Honour then was) approving the prior observations of McMurdo J (as his Honour then was) to this effect.

[10]  This is an assignment clause.

Close

Editorial Notes

  • Published Case Name:

    Bargain World CQ (Rockhampton) Pty Ltd v AHC Limited

  • Shortened Case Name:

    Bargain World CQ (Rockhampton) Pty Ltd v AHC Limited

  • MNC:

    [2023] QSC 201

  • Court:

    QSC

  • Judge(s):

    Sullivan J

  • Date:

    05 Sep 2023

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
2 citations
Jump To
Cite 1 - (1973) 129 CLR 99
Cite 2 - (1973) 129 CLR 99
Beaufort Developments (NI) Ltd v Gilbert-Ash NI Ltd [1999] 1 AC 266
2 citations
Jump To
Cite 1 - [1999] 1 AC 266
Cite 2 - [1999] 1 AC 266
Dovuro Pty Ltd v Wilkins [2000] FCA 1902
2 citations
Jump To
Cite 1 - [2000] FCA 1902
Cite 2 - [2000] FCA 1902
Dovuro Pty Ltd v Wilkins (2000) 105 FCR 476
1 citation
Jump To
Cite 1 - (2000) 105 FCR 476
Dryden Construction Co Ltd v New Zealand Insurance Co Ltd [1959] NZLR 1336
2 citations
Jump To
Cite 1 - [1959] NZLR 1336
Cite 2 - [1959] NZLR 1336
Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd and Ors (2014) 251 CLR 640
2 citations
Jump To
Cite 1 - (2014) 251 CLR 640
Cite 2 - (2014) 251 CLR 640
Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985
2 citations
Jump To
Cite 1 - [2010] NSWSC 985
Cite 2 - [2010] NSWSC 985
HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 342
2 citations
Jump To
Cite 1 - [2016] NSWCA 342
Cite 2 - [2016] NSWCA 342
LCA Marrickville Pty Limited v Swiss Re International SE (2022) 290 FCR 435
2 citations
Jump To
Cite 1 - (2022) 290 FCR 435
Cite 2 - (2022) 290 FCR 435
Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (2010) 15 BPR 28
1 citation
Jump To
Cite 1 - (2010) 15 BPR 28
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
3 citations
Jump To
Cite 1 - (2015) 256 CLR 104
Cite 2 - (2015) 256 CLR 104
Cite 3 - (2015) 256 CLR 104
North v Marina [2003] NSWSC 64
2 citations
Jump To
Cite 1 - [2003] NSWSC 64
Cite 2 - [2003] NSWSC 64
Project Blue Sky v Australian Broadcasting Authority (1998) 194 C.L.R 355
2 citations
Jump To
Cite 1 - (1998) 194 C.L.R 355
Cite 2 - (1998) 194 C.L.R 355
Re Sigma Finance Corp [2009] UKSC 2
2 citations
Jump To
Cite 1 - [2009] UKSC 2
Cite 2 - [2009] UKSC 2
Re Strand Music Hall Co Ltd; Ex parte European and American Finance Co Ltd (1865) 35 Beav 153
2 citations
Jump To
Cite 1 - (1865) 35 Beav 153
Cite 2 - (1865) 35 Beav 153
Tripple A Pty Ltd v WIN Television Qld Pty Ltd [2018] QCA 246
3 citations
Jump To
Cite 1 - [2018] QCA 246
Cite 2 - [2018] QCA 246
Cite 3 - [2018] QCA 246
Willkie v Gordian Run-off Ltd (2005) 221 CLR 522
3 citations
Jump To
Cite 1 - (2005) 221 CLR 522
Cite 2 - (2005) 221 CLR 522
Cite 3 - (2005) 221 CLR 522
XL Insurance Co Se v BNY Trust Company of Australia Ltd [2019] NSWCA 215
2 citations
Jump To
Cite 1 - [2019] NSWCA 215
Cite 2 - [2019] NSWCA 215

Cases Citing

Case NameFull CitationFrequency
GSRK Pty Ltd v Detour Restaurant Pty Ltd [2024] QCAT 952 citations
1

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