AMP Capital Investors Limited v Willis Australia Limited (No.2) [2022] NSWSC 1552

Supreme Court New South Wales

Medium Neutral Citation: AMP Capital Investors Limited v Willis Australia Limited (No.2) [2022] NSWSC 1552 Hearing dates: On the papers Date of orders: 11 November 2022 Decision date: 11 November 2022 Jurisdiction: Equity - Real Property List Before: White J Decision: See para [21] Catchwords: JUDGMENTS AND ORDERS – orders to give effect to reasons Legislation Cited: Civil Procedure Act 2005 (NSW), s 100 Uniform Civil Procedure Rules 2005 (NSW), r 6.24(1) Cases Cited: AMP Capital Investors Limited v Willis Australia Limited [2022] NSWSC 1415 Dome Resources NL v Silver (2008) 72 NSWLR 693; [2009] NSWCA 322 Category: Consequential orders Parties: AMP Capital Investors Limited (Plaintiff/Cross Defendant) Willis Australia Limited (Defendant/Cross Claimant) Representation: Counsel: M Walton SC with N Furlan C Birch SC with A Byrne

Solicitors: Minter Ellison (Plaintiff) Holman Webb Lawyers (Defendant) File Number(s): 2021/00169060

Judgment 1. HIS HONOUR: In my reasons of 19 October 2022 (AMP Capital Investors Limited v Willis Australia Limited [2022] NSWSC 1415) I directed the parties to bring in short minutes of order and provide short written submissions if there were a dispute as to the appropriate orders to be made in accordance with my reasons. 2. I have been advised that the plaintiff, AMP Capital Investors Limited ("AMP"), held the Premises as trust property for the benefit of a trust known as AWOF I. I have been advised that it retired as trustee of the trust on 30 September 2022 and that on 1 October 2022 Mirvac Funds Management Australia Limited ("Mirvac") was appointed as the new trustee of the trust and is now the legal owner of the Premises and the Expanded Premises. 3. The plaintiff submits that Mirvac should be joined as a party to the proceedings and that the new lease over the Premises and the Expanded Premises that will be the subject of the court's order for specific performance will be between Mirvac as landlord and the defendant ("Willis") as tenant. The plaintiff proposes that Mirvac be joined as the second plaintiff. Willis submits that AMP should be removed as a plaintiff and be replaced by Mirvac. 4. Nothing should turn on this question. Even if AMP is removed as plaintiff, the costs recoverable by Mirvac should include the recoverable costs payable to the previous trustee. But questions may arise as to the procedures for assessment of costs if AMP is removed as plaintiff. The better course is that proposed by AMP, namely, that Mirvac be added as an existing plaintiff. Neither party suggests that AMP and Mirvac have a conflict of interest that would preclude the joinder of Mirvac as a second plaintiff. 5. The second issue concerns my findings upon AMP's capacity to waive cl 20.4(d) and (e). AMP submits that an order for specific performance should be made in the following terms: "6. Orders the Agreement to Lease be specifically performed by: (a) the defendant as "Tenant" executing a new lease of the Premises and the Expanded Premises, with the second plaintiff as "Landlord" or with its successor or assign as "Landlord", in registerable [sic] form prepared and delivered to the defendant by the second plaintiff Landlord, for a term of 4 years commencing on 1 October 2020 on the terms specified in clause 20.5 of Annexure A to the Lease (New Lease); (b) the parties completing the market review in accordance with the provisions of Schedule 4 of Annexure A to the lease, to determine the base rent per square metre of the premises the subject of the New Lease (New Base Rent); (c) upon the completion of the market review, the defendant providing a Bank Guarantee (as defined in clause 29.3, Schedule 1 – Definitions and Interpretation of Annexure A to the lease) to the second plaintiff Landlord, to secure the Tenant's obligations under the New Lease, for the amount that is 50% of the New Base Rent and the Outgoings Contribution payable from time to time plus GST payable in connection with the New Base Rent and Outgoings Contribution; and (d) upon the completion of the market review, the defendant paying the New Base Rent and Outgoings Contribution plus GST, to the second plaintiff Landlord in accordance with the provisions of the New Lease from 1 October 2020 and interest thereon under s100 of the Civil Procedure Act 2005 (NSW) calculated to the date of these orders." 1. Willis opposes the making of orders 6(c) and (d). Consistently with its opposition to order 6(c), Willis proposes that order 2 provide that it be declared that by its giving to AMP the written notices of 20 December 2019 and by AMP's waiving compliance with cll 20.4(d) and (e) of Annexure A to the Lease a valid and enforceable agreement came into existence between the parties for the grant of a lease of the Premises and the Expanded Premises. 2. Willis' opposition to proposed order 6(c) misconceives my reasons. I found (at [68]) that the timely provision of the guarantee was capable of being waived. Because Willis did not provide the bank guarantee before the expiry of the option, AMP was not bound to grant it a new lease. I held that, because that condition was solely for AMP's benefit, AMP could waive the timely provision of the guarantee. I did not find that AMP had waived the security of a bank guarantee. 3. Willis submits that I did not expressly state that AMP had in fact waived compliance with the conditions in cl 20.4(d) and (e). That is true. No question of waiving compliance with the condition in cl 20.4(d) arose because it was not suggested that Willis was in breach of the lease. By insisting that Willis exercise the option notwithstanding that no bank guarantee had been provided before the Expiry Date it is self-evident that AMP did not insist on (that is, it waived) the timely provision of the guarantee. 4. Accordingly, the amendments sought by Willis to AMP's proposed short minutes of order concerning the provision of a bank guarantee should not be made. 5. Willis opposes proposed order 6(d) on the ground that it was not sought in the amended statement of claim and was not the subject of debate or controversy at the hearing. 6. The relevant relief sought in the amended statement of claim was: "6. An order that the Agreement to Lease be specifically performed by: (a) the defendant executing a new lease of the Premises and the Expanded Premises for a term of 4 years commencing on 1 October 2020 on the terms specified in clause 20.5 of Annexure A to the Lease (New Lease); and (b) the defendant providing a bank guarantee to the plaintiff to secure its obligations under the New Lease, in the amount of $3,092,402.50" 7. Such further or other order or orders as may be required for the implementation of the order for specific performance. 8. In the alternative, damages pursuant to s 68 of the Supreme Court Act 1970 (NSW). 9. Interest up to judgment pursuant to s 100 of the Civil Procedure Act 2005 (NSW)." 1. AMP submits that proposed order 6(d) is uncontroversial and says it is just that Willis be ordered to pay interest. 2. The lease does not impose an obligation on the tenant to pay interest on late payment of rent. A court can order the payment of interest under s 100 of the Civil Procedure Act 2005 (NSW) where the proceedings are for the recovery of money including any debt or damages and where interest is not payable as of right (s 100(1) and (3)(b)). 3. Although the amended statement of claim sought damages, that was in the alternative to the claim for specific performance and was not pressed. 4. The relief sought did not include a claim for rent payable from 1 October 2020. 5. The fact that the proceedings are properly characterised as proceedings for specific performance does not mean that they are not also proceedings for the recovery of money within the meaning of s 100. An order for specific performance that requires the payment of money is a judgment in which interest may be included (Dome Resources NL v Silver (2008) 72 NSWLR 693; [2009] NSWCA 322 at [71]-[78]). 6. A claim for interest under s 100 was made in the amended statement of claim. Willis made no answer to the merits of the claim for interest. 7. Although the order for specific performance sought in the amended statement of claim did not include an order for payment of rent owing from 1 October 2020, such a claim is within the relief sought in para 7 of the pleading. It could occasion no surprise that if AMP succeeded in its claim that Willis was bound by its exercise of option, Willis would be liable for such rent as from 1 October 2020 once a market rent was determined. 8. Willis does not point to any prejudice arising from the claim having not been specifically pleaded. 9. For these reasons, and for my reasons of 19 October 2022 I make the following orders. 10. The Court: 1. Orders, pursuant to rule 6.24(1) of the Uniform Civil Procedure Rules 2005 (NSW) that Mirvac Funds Management Australia Limited ACN 653 080 463 be joined to these proceedings as the second plaintiff and that AMP Capital Investors Limited be named hereafter as the first plaintiff. 2. Declares that clauses 20.3 and 20.4 of Annexure A to the registered lease (dealing number AJ50597A) dated 21 January 2014 between the first plaintiff (as lessor) and the defendant (as lessee) of premises situated at and known as Suite 1 on Level 15 and the whole of Level 16, Angel Place, 117-123 Pitt Street, Sydney, NSW (Lease), granted to the defendant a valid and enforceable option to take a lease of: 1. Suite 1 on Level 15 and the whole of Level 16, Angel Place, 117-123 Pitt Street Sydney, NSW (Premises); and 2. the Expanded Premises (as the term is defined in clause 20.3 of Annexure A to the Lease), for a term of four years commencing on 1 October 2020 on the terms specified in clause 20.5 of Annexure A to the Lease (Option). 1. Declares that, by the defendant giving to the first plaintiff: 1. a written notice dated 20 December 2019 under clause 20.1(a) of Annexure A to the Lease; and 2. a written notice dated 20 December 2019 under clause 20.3 of Annexure A to the Lease, the defendant exercised its Option, the defendant exercised its option. 1. Declares that, by reason of the defendant's exercising its Option, a valid and enforceable agreement came into existence between the parties whereby the first plaintiff (as lessor) agreed to grant, and the defendant (as lessee), agreed to take, a lease of the Premises and the Expanded Premises for a term of four years commencing on 1 October 2020 on the terms specified in clause 20.5 of Annexure A to the Lease (Agreement to Lease). 2. Declares that on their proper construction, the words "Base Rent" in clause 1.3 of Schedule 4 of the Lease mean "base rent per square metre" with the result that clause 1.3 operates upon the base rent per square metre of the premises the subject of any new lease to which that clause refers. 3. Orders the Agreement to Lease be specifically performed by: 1. the defendant as "Tenant" executing a new lease of the Premises and the Expanded Premises, with the second plaintiff as "Landlord", in registrable form prepared and delivered to the defendant by the second plaintiff Landlord, for a term of 4 years commencing on 1 October 2020 on the terms specified in clause 20.5 of Annexure A to the Lease (New Lease); 2. the parties completing the market review in accordance with the provisions of Schedule 4 of Annexure A to the lease, to determine the base rent per square metre of the premises the subject of the New Lease (New Base Rent); 3. upon the completion of the market review, the defendant providing a Bank Guarantee (as defined in clause 29.3, Schedule 1 – Definitions and Interpretation of Annexure A to the lease) to the second plaintiff, to secure the Tenant's obligations under the New Lease, for the amount that is 50% of the New Base Rent and the Outgoings Contribution payable from time to time plus GST payable in connection with the New Base Rent and Outgoings Contribution; and 4. upon the completion of the market review, the defendant paying the New Base Rent and Outgoings Contribution plus GST, to the second plaintiff in accordance with the provisions of the New Lease from 1 October 2020 and interest thereon under s100 of the Civil Procedure Act 2005 (NSW) calculated to the date of these orders. 1. Dismisses the cross claim. 2. Orders the defendant to pay the plaintiffs' costs of the proceedings including the cross claim. 3. Grants the parties liberty to apply in respect of any further orders that may be required to implement the order for specific performance and reserves the proceeding for further consideration.