Graham v Markets Hotel Pty Ltd [1943] HCA 8

Refd to Ay UF I O38 ee Breathe 126 MER 453 Gee), WS 280 67 C.L.R.] OF AUSTRALIA. (HIGH COURT OF AUSTRALIA] GRAHAM AND ANOTHER . ' 5 5 APPELLANTS ; PLAINTIFFS,

THE MARKETS HOTEL PROPRIETARY

AND

LIMITED :. RESPONDENT.

DEFENDANT,

ON APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALES.

Landlord and Tenant—Sub-lease—Covenant to repair, maintain and keep all buildings , CO, or A,

and to yield up in repair—Licensed premises—Inherent structural defect— Lavatory—Removal during term of sub-lease—Non-restoration at expiration of term—Breach of covenant—Measure of damages—Construction of lavatory— Statutory requirements—Consequential alterations—Remodelling of premises— Cost—Liability of sub-lessee—Value of reversion—Diminution—Conveyancing Act 1919-1939 (N.S.W.) (No. 6 of 1919—No, 18 of 1939), s. 133 (1).

The plaintiffs were the lessees of a licensed hotel in Sydney. They granted a sub-lease which was assigned to the defendant. When the sub-lease was granted there was in the basement of the hotel a lavatory which could be approached only by steep and dangerous steps and was badly lighted and poorly ventilated. The sub-lease contained a covenant that the sub-lessee would repair, maintain and keep all buildings and all internal and external walls, sewers, drains and appurtenances and would yield up in repair at the end of the term. During the term the lavatory was dismantled and closed by the sub-lessee and another lavatory was installed in adjoining premises which were leased by the defendant and to which the plaintiffs had no title. At the end of the term the demised premises were yielded up without any lavatory what- ever. In order to continue the demised premises as a hotel and to obtain a new licence therefor it was necessary under the Liquor Act 1912 (N.S.W.) for the plaintiffs to instal sanitary accommodation. This they did in the course of an extensive remodelling of the premises, at a cost of £3,078, in accordance with plans prepared in conformity with statutory and departmental require- ments and approved by the Licensing Court. The plaintiffs claimed that the