MODIFICATIONS PTY LTD v DOYLE [1991] NSWCA 203

MODIFICATIONS PTY LTD v DOYLE

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

KIRBY P, PRIESTLEY and CLARKE JJA 5 April 1991, 19 April 1991

[1991] NSWCA 203

CONTRACT — interpretation of lease — formula for rent if option to extend exercised ambiguity — held: — Court should prefer sensible construction requiring market rent and avoid surgery to language of lease. Hide and Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) LEASEHOLD — rent — construction of formula providing for

LEASEHOLD — rent of demised premises — option to extend leasehold term — options validly exercised — formula for determination of rent — ambiguity of formula — construction of clause — no completely satisfactory meaning — strained interpretations of clauses required by either available construction — held: (per Priestley JA; Kirby P concurring; Clarke JA dissenting) (setting aside orders and declaration of Giles J). The more sensible construction, which required payment of the then current market rent of the premises, should be preferred — such construction involved a more satisfactory construction of the language of the lease provisions and required less surgery to the language than that preferred by the trial judge.

CONTRACT — interpretation of — availability of — subsequent behaviour of parties as and to — tender of movements of CPI index which occurred after lease referring to it executed held: The index numbers were not admissible. Hide and Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 referred to.

Kirby P I agree with Priestley JA.

Priestley JA This appeal raises a question of construction of some clauses in a lease of commercial premises dated 1 December 1987, the term of which was three years, commencing on | April 1987. The lease contained provisions by which the lessees (on certain conditions) were entitled to further leases of the demised premises. The lessees gave notice, no question of the validity of which has been raised in the present proceedings, of their desire to have a further lease. Following the giving of notice, a dispute arose over the meaning of CL4 and CLS. These clauses provided for the rent payable under the further lease and for increases in rent during its term.