DARLING POINT SECURITIES PTY LTD v INDUSTRIAL EQUITY PTY LTDDARLING POINT SECURITIES PTY LTD v REALTY PROPERTY GROUP HOLDING CO PTY LTD [1991] NSWCA 296

DARLING POINT SECURITIES PTY LTD v INDUSTRIAL EQUITY PTY LTD DARLING POINT SECURITIES PTY LTD v REALTY PROPERTY GROUP HOLDING CO PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

PRIESTLEY, CLARKE and HANDLEY JJA 7 June 1991, 9 July 1991 [1991] NSWCA 296

AGREEMENT FOR LEASE — CONSTRUCTION OF AGREEMENT — UNCERTAINTY INTENTION TO CONTRACT — COMMENCEMENT DATE — BINDING AGREEMENT

Priestley JA The material facts are set out in the reasons of Clarke JA. I agree with him about the meaning of CL7 of the Heads of Agreement. In the circumstances known to all the parties when they made that agreement, the meaning of CL7 as explained by Clarke JA seems to me clearly the most appropriate; that is, it fits better than any other with the words used by the parties, in the light of their various business interests and the commercial factors then known to them all.

T agree with Clarke JA's comments concerning the appeal books, and with the orders he proposes.

Clarke JA On 5 April 1990 the appellant, the first and second respondents, andJohn Howard Lyons entered into an agreement under seal described as Heads of Agreement. As the preamble evidences the document was executed as a means by which the joint venture and other arrangements between the parties could be dissolved in an orderly fashion. The present dispute concerns the proper construction of CL7 of the Heads of Agreement which reads: "Darling Point Securities Pty Limited will continue to operate its Hotel business at The Golden Sheaf from the current premises at a rental of $9,000 per week. If IEL/RPG retains the building or develops along pre-existing designs, Darling Point Securities Pty Limited or nominee shall be granted a first right of refusal to continue to conduct the Golden Sheaf Tavern in the retained premises or in any new development AND if IEL/RPG sells or otherwise develops other than in accordance with pre-existing design considerations, it or they will use their best: endeavours to ensure that any purchaser, partner, joint venturer or other participant shall first offer to Darling Point Securities Pty Limited or nominee the right to continue to conduct the Golden Sheaf Tavern as above. In the event of a sale of the Golden Sheaf the goodwill will be to the account of the Lessors and the Liquor licence will revert back to the Lessors.