Darzi Group Pty Ltd v Nolde Pty Ltd [2021] NSWSC 774

Supreme Court New South Wales

Medium Neutral Citation: Darzi Group Pty Ltd v Nolde Pty Ltd [2021] NSWSC 774 Hearing dates: 8 to 14 April 2021 Decision date: 28 June 2021 Jurisdiction: Equity - Real Property List Before: Robb J Decision: See pars [139], [142], [211], [234], [239], [242], [247], [252], [262], [266], [285], [291]-[295]. The parties should confer and forward to my Associate draft short minutes of order to give effect to these reasons as required by [295]. Catchwords: LEASES AND TENANCIES — Renewals and options — Exercise of option — Where lessee commenced original proceedings seeking declaration that the parties had entered into a retail lease — Where Court of Appeal held the parties had entered into a retail lease — Where lessee now seeks specific performance of lessor's agreement to renew the lease pursuant to lessee's exercise of option — Where lessor pleads that the Court should use its discretion to withhold specific performance on account of the inability of the parties to cooperate, the toxic interpersonal relationship between the principals of the lessor and lessee, and because damages would be an adequate remedy — Where the Court found that a breakdown in personal relations between principals of parties to the lease is not a proper basis for the Court to deny the lessee its proprietary right to a renewal of the lease — Where the Court found that damages are not an adequate remedy — Where the Court grants specific performance of lessor's agreement to grant a renewed lease to lessee LEASES AND TENANCIES — Retail leases — Retail shop lease — Lessee in breach of obligations — Where lessor claimed lessee failed to pay rent in circumstances where lessee paid less than the rent due under the lease on its interpretation of the operation of the Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW) — Where COVID-19 regulatory regime required rent to be renegotiated in good faith by lessor and lessee — Where lessor failed to renegotiate in good faith — Where the Court found that the lessor will never be entitled to take a prescribed action against lessee in respect of the short payments in rent LEASES AND TENANCIES — Retail leases — Retail shop lease — Lessee in breach of obligations — Where lessor claimed lessee failed to pay insurance premiums in relation to outgoings pursuant to the lease — Where lessor and lessee disputed the meaning of 'insurance' — Where lessor claimed lessee must pay a share of product and public liability insurance — Where lessee held its own insurance in that regard — Where the Court held that the lessee did not breach the lease by failing to pay the share of premiums claimed by the lessor LEASES AND TENANCIES — Retail leases — Retail shop lease — Lessee in breach of obligations — Where lessor claimed lessee failed to maintain the premises in good condition — Where lessor sought order requiring lessee to perform a list of maintenance tasks — Where it is unclear on the evidence whether the rectification of the alleged breaches are the responsibility of the lessor or lessee under the lease — Where the Court held that it should make an appropriate order that will facilitate the Court being able to make an order in relation to the cleaning, repair and maintenance of the Premises LEASES AND TENANCIES — Retail leases — Retail shop lease — Lessee in breach of obligations — Where lessor claimed lessee failed to provide access to the premises for inspection — Where no evidence lessor sought to access premises for purpose of inspection — Where the Court refused to make the orders sought by the lessor TORTS — Trespass to land — Damages — Where lessor claimed damages against lessee for trespass on parts of property outside leased premises — Where lessor has not proved that it suffered any loss — Where lessor has not establish that it had title to bring a claim in trespass against lessee — Where the Court found that if the lessor has title to bring a claim in trespass, the damages awardable would be nominal in any event Legislation Cited: Competition and Consumer Act 2010 (Cth) Conveyancing Act 1919 (NSW) COVID-19 Legislation Amendment (Emergency Measures) Act 2020 (NSW) COVID-19 Recovery Act 2021 (NSW) Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020 (NSW) Retail and Other Commercial Leases (COVID-19) Regulation (No 2) 2020 (NSW) Retail and Other Commercial Leases (COVID-19) Regulation (No 3) 2020 (NSW) Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW) Retail Leases Act 1994 (NSW) Supreme Court Act 1970 (NSW) Cases Cited: Casquash Pty Ltd v NSW Squash Ltd (No 2) [2012] NSWSC 522 Darzi Group Pty Ltd v Nolde Pty Ltd [2019] NSWCA 210 Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2) [2020] NSWSC 1141 Sydney West Area Health Service v Staracek (2008) 73 NSWLR 68; [2008] NSWSC 744 Texts Cited: DK Derrington and RS Ashton, The Law of Liability Insurance (3rd ed, 2013, LexisNexis Butterworths) D Kelly and ML Ball, Principles of Insurance Law (2001, LexisNexis Australia, looseleaf) RP Balkin and JLR Davis, Law of Torts (5th ed, 2013, LexisNexis Butterworths) Category: Principal judgment Parties: Darzi Group Pty Ltd (plaintiff) Nolde Pty Ltd (defendant) Representation: Counsel: WG Muddle SC/ E Peden SC (plaintiff) CD Wood SC/ DW Robertson (defendant)