SANTA PRISCA IMPORTS PTY LTD v ACTION MOTOR GROUP PTY LTD [1996] NSWCA 583

SANTA PRISCA IMPORTS PTY LTD v ACTION MOTOR GROUP PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MAHONEY P, MEAGHER and SHELLER JJA 17 May 1996, 11 June 1996

CONTRACTS — agreement for lease wrongful repudiation — concurrent obligations under the agreement — termination — damages

On 28 June 1991, Santa Prisca Imports (SPI) and Action Motor Group (AMG) entered into an agreement for lease of premises from 1 March 1992 to 29 February 1996. Pursuant to CL4, SPI, the lessor agreed to install a motor vehicle hoist in consideration of AMG, the lessee, entering into the agreement. SPI was to use its 'best endeavours' to ensure the construction would take place before 31 August 1991. Time was not of the essence.

At the time the agreement was entered into, AMG was in occupation of the premises, subject to a sub-lease which was due to expire on 29 February 1992. On 23 March, when the hoist had still not been constructed, AMG gave a notice to vacate. SPI began proceedings in the Commercial Division claiming a declaration of wrongful repudiation and damages. In response, AMG asserted that SPI, by failing to construct the hoist within a reasonable time, was in breach of the agreement.

Cole J found that AMG was entitled to have the hoist installed prior to the execution of the lease. SPI was in breach of a 'serious and important' obligation under the agreement for lease, and thus it had released AMG from its obligations thereunder. SPI appealed from this decision.

HELD:

1. Time was not of the essence for the carrying out of the obligations under the agreement. Where no date is specified, the mere fact that one promise is given in consideration for the performance of another does not establish some priority in performance.

2. Continued non-performance of a term of an agreement may, after a period of time and in particular circumstances, evince an intention no longer to be bound by the terms of the agreement or its inability to perform it. Carr v JA Berriman Pty Ltd (1953) 89 CLR 327 at 349 per Fullagar J.