37 York Road Pty Ltd v Reece Australia Pty Limited [2024] NSWSC 1213

Supreme Court New South Wales

Medium Neutral Citation: 37 York Road Pty Ltd v Reece Australia Pty Limited [2024] NSWSC 1213 Hearing dates: 23 September 2024 Date of orders: 27 September 2024 Decision date: 27 September 2024 Jurisdiction: Equity - Technology and Construction List Before: Hammerschlag CJ in Eq Decision: Answer the separate question as follows: on the proper construction of the lease entered into on 1 November 2013, the defendant is obliged to remove the Tenant Works and reinstate the Premises (except for fair wear and tear) by reference to their condition at the commencement of that lease and not to their condition at the commencement of the prior leases between them Catchwords: LEASES AND TENANCIES – Construction and interpretation – Plaintiff Lessor had previously leased premises to the Defendant Lessee under two leases which required the Defendant to carry out defined Tenant Works and required the defendant to remove those works on the termination of the leases if the Lessor required – The works were carried out – Each lease contained two 5-year extension options – The Defendant exercised its first 5-year option under each lease which provided that the renewed lease must contain the same terms as the original but with no option for renewal after the last option has been exercised – The parties, however, negotiated new terms and a fresh lease, not containing the same terms as the original lease, was entered into for a period of 10 years – The new lease contained a term (cl 16.3) obliging the Lessee, if required by the Lessor, to remove the Tenant Works and reinstate the Premises except for fair wear and tear – The lease defined Tenant Works to mean "any improvement, alteration (whether structural or otherwise), or addition to the Premises or any demolition, landscaping or earthworks on the Premises, to be performed by the Tenant and referred to in Item 11(b) of Schedule 1" – Item 11(b) of Schedule 1 stated that Item 11(b) was "Not applicable" – The Court ordered that there be heard as a separate question, whether on the proper construction of the lease, the Defendant was obliged to remove the Tenant Works and reinstate the Premises to their condition when the Defendant commenced its occupation of the Premises at the times of the two earlier leases or at the time of the third lease – HELD that on the proper construction of the lease, the Defendant was obliged to remove the Tenant Works and reinstate the Premises by reference to the condition of the Premises at the commencement of the third lease Category: Principal judgment Parties: 37 York Rd Pty Ltd (Plaintiff) Reece Australia Pty Limited (Defendant) Representation: Counsel: MR Elliott SC with D Ratnam (Plaintiff) J Pokoney (Defendant)