GOLDMAN SACHS (AUSTRALIA) LTD v SBCDB ADMINISTRATION PTY LTD [1993] NSWCA 110

GOLDMAN SACHS (AUSTRALIA) LTD v SBCDB ADMINISTRATION PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MAHONEY, MEAGHER and SHELLER JJA 21 April 1993, 2 June 1993

[1993] NSWCA 110

In a proviso to one of the preconditions to valid exercise of an option in a sublease, the respondent sublessor covenanted to notify the appellant sublessee, before the end of the original term, whether or not the respondent intended to exercise its option to renew under the head lease. The respondent did not give such notice.

The respondent complied otherwise with the preconditions and purported to exercise the option. The appellant claimed that the failure to give notice was either a failure to fulfil a condition precedent or a breach of a promissory condition requiring strict or substantial performance. The appellant appealed from an order that it specifically perform its obligations by executing the sublease.

Held:

1. As the covenant had not been performed, the relevant question was whether performance was essential to the valid exercise of the option.

2. The advantage or disadvantage to the appellant of performance or non-performance was inconsequential, so that the importance of the covenant was not such as to require either strict or substantial performance; accordingly performance of the covenant was not essential to the valid exercise of the option.

3. The trial judge's orders should not be disturbed.

Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 579 Tramways Advertising Pty Ltd v Luna Park (NSW) Pty Ltd (1938) SR 9NSW) 632 Associated Newspapers Ltd v Bancks (1951) 83 CLR 332

Bentsen v Taylor, Sons and Co [1893] 2 QB 274

Tricontinental Corporation v HDFI Ltd (1990) 21 NSWLR 689

Mahoney JA I agree with the judgment of Sheller JA and the orders proposed. Meagher JA I agree with Sheller JA.