HEYSHAM PROPERTIES PTY LTD v ACTION MOTOR GROUP PTY LTD and ORS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL HANDLEY, SHELLER and POWELL JJA 16 May 1996, 15 November 1996 [1996] NSWCA 580 Contract — Offer and acceptance — "Heads of Agreement" for grant of a lease of commercial premises — Whether binding agreement for lease. Landlord and Tenant — "Heads of Agreement" for grant of lease — Draft lease provides for guarantee of proposed tenant's obligations — Draft lease not executed — Whether proposed guarantors liable. Handley JA I agree with Sheller and Powell JJA. Sheller JA For the reasons given by Powell JA this appeal should be dismissed. The appellant's principal argument on the appeal was based upon what is called the fourth category of the principle stated in Masters v Cameron (1954) 91 CLR 253, which covers the case in which the parties are content to be bound immediately and exclusively by the terms upon which they have agreed whilst expecting to make a further contract in substitution for the first contract containing, by consent, additional terms (Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) NSW Conv R 55-299 at 56,787 and Sinclair Scott and Co v Naughton (1929) 43 CLR 310 at 317). This argument was never put to Rolfe J. The argument his Honour addressed was that the heads of agreement, read with the lease to Kezis and the memorandum referred to in that lease, in so far as they were not inconsistent with the heads of agreement, constituted a binding contract within the second category referred to in Masters v Cameron; see appeal book 324, 329 and 335 where his Honour rejected that argument. Be that as it may, I am not persuaded that the parties were content to be bound immediately and exclusively by the terms of the heads of agreement which they had signed. In their subsequent letter to the respondent's solicitors on 29 June 1990, with which was enclosed a form of lease, the appellant's solicitors wrote: "The lease is submitted to you for consideration and any necessary discussion and we emphasise that our client company has yet to consider the document and give its approval, and we reserve the right on behalf of our client to make any necessary alterations to accord with its instructions and the heads of agreement." On 19 February 1991 the appellant's solicitors wrote again referring to the earlier letter and a subsequent conversation and advising "We have made certain alterations to the lease on our client's instructions." Rolfe J referred to this letter in his judgment and said: "Therefore, notwithstanding the agreement for which the plaintiff now contends, it was considered that the plaintiff could, none-the-less, make alterations at that stage. After setting out those matters, there was a request for the names and addresses of the guarantees 'and any further directors' and for their execution of the document. There was also a request to 2 UNREPORTED JUDGMENTS obtain 'pursuant to the Heads of Agreement copies of current financial statements for the Lessee which are to be provided prior to execution by your client of the lease'. No reason was advanced why the lease, if it evidenced a concluded contract, should not have been executed without more. On 29 April 1991 the solicitors for the plaintiff sought 'that the executed lease and fees and disbursements be returned to us as a matter of urgency'. This did not happen, either as a matter or urgency or at all." His Honour continued: "By letter dated 26 July 1991 the solicitors for the defendants wrote to the solicitors for the plaintiff complaining about inadequate ventilation and flooding in the premises, requesting that those matters be attended to and stating:- "We are instructed to advise that unless the premises are made fit for the purpose for which they are to be used our clients will be left with no option but to give the required notices of their intention to vacate. By letter dated 27 September 1991 the solicitors for the defendants stated that their clients would not execute the lease as they did not accept the terms thereof and refused to accept the terms and conditions in the draft lease 'on the basis that the disclosed use of the premises are (sic) unlawful'. The defendants gave notice that they would be vacating the premises at the expiration of one calendar month 'from the date of service of this notice'. By letter dated 31 October 1991 the solicitors for the plaintiff dented the entitlement of the defendants to terminate 'the relationship with out client' and stated that: "Our client instructs us that it holds your client to the terms of the Heads of Agreement and looks to it to maintain its rental payments in full and on time and in accordance with the Heads of Agreement and Lease SUBMITTED until such time as our client is in a position to replace your client as tenant and thereby mitigate the further loss that will be incurred.' (My emphasis) It was then stated that if the defendants proposed to remain on the premises the lease had to be signed. There was no suggestion of an anterior binding agreement. On 24 November 1991 the defendants vacated the premises. It did not seem to be in issue that rent to the date was paid." In their letter of 31 October 1991 the appellant's solicitors did not suggest that the Heads of Agreement stood alone as a binding document subject only to additions and amendments the parties together consented to. In my opinion the appeal should be dismissed with costs. Powell JA The first question which arises for determination upon this appeal from a Judgment delivered, and Orders made, by Rolfe J on 5 November 1992 in proceedings which had been brought by the Appellant to recover from the First Respondent damages for what was alleged to have been a repudiation of a concluded agreement for lease of certain commercial premises and seeking to enforce against the Second to Fourth Respondents inclusive what was said to have been a guarantee given by them of the performance by the First Respondent of the obligations imposed upon it pursuant to that alleged agreement for lease is: 1. whether the Court ought to entertain the submissions advanced on the appeal by the Appellant, which submissions appear to differ from those advanced by the Appellant on the hearing of the proceedings at first instance. The other questions which will, or may, arise for determination upon this appeal are: 2. whether or not the Court entertains the submissions sought to be advanced by the Appellant on the hearing of the appeal, whether Rolfe J erred when he held that the Appellant had failed to establish that there had been a concluded agreement for a lease; WHEYSHAM PROPERTIES PTY LTD v ACTION MOTOR GROUP PTY LTD and ORS (Powell JA) 3. whether or not the Second to Fourth Respondents, or any of them, had given to the Appellant any guarantee of the First Respondent's obligations under the alleged agreement for lease. The facts which have given rise to those questions are as I set out below. At all material times, the Appellant has been registered as the proprietor of the land comprised in Folio Identifier 1/740001, upon which is erected a commercial building known as 29A Oxford Street, Darlinghurst and 16-18 Poplar Street, Darlinghurst. On or about 5 November 1985, the Appellant, then known as Whyte Hall Pty Ltd, granted to Kezis Pty Ltd ("Kezis') a lease - later given dealing No W724201 - of portion of the land comprised in Folio Identifier 1/740001 - which portion ("the subject premises") appears to have been the basement, ground floor and mezzanine level, or parts thereof, of the building erected on the land - for a term of 6 years commencing on 1 November 1985 and terminating on 31 October 1991, together with an Option to Renew the lease for a further term of 4 years. The form of lease (Appeal Book at 80 ff) provided that the term which was granted was subject to the covenants and provisions: (a) set forth in the Memorandum filed in the Registrar General's Office and given dealing No 90003 (see Real Property Act 1900 s80A); and (b) set forth in Schedule 2 to the form of lease, which Schedule referred to certain pages which were attached to the form of lease. which covenants and provisions were to be deemed to have been incorporated therein. So far as is relevant, Memorandum registered No V90003 (Appeal Book at 203 provided (inter alia): "20.01 GUARANTEE AND INDEMNITY Where a Guarantor has executed the lease then such guarantor in consideration of the landlord entering into the lease at the Guarantor's request GUARANTEES to the Landlord due and a punctual performance by the Tenant of the obligations on its part to be performed under the Lease AND INDEMNIFIES and agrees to indemnify the Landlord against all loss damage costs and expenses suffered or incurred by the landlord as a result of any failure of the tenant to pay any moneys under the lease or any breach by the tenant of any of the covenants and conditions contained or implied in the lease..." So far as is relevant, the pages (Appeal Book at 82 ff) which were attached to the form of lease contained the follow (inter alia) provisions: "ARTICLE II: RENT 2.01 BASE RENTAL The 'base rental' means the annual amount stipulated in Item I subject to review as provided in this Lease. 2.02 PAYMENT OF BASE RENTAL The Tenant shall pay the base rental free of any deductions to the Landlord by equal monthly instalments in advance on the first day of each month with a proportional payment for any broken portion of a month at the commencement or termination of any Lease Year of this Lease. 2.03 RENTAL REVIEW During the three (3) calendar months immediately preceding each of the times stipulated in Item 2 (called the "rent review period ") the Landlord shall be entitled to increase the base rental to a new annual amount (called the 'revised base rental') by serving written notice of the revised base rental on the Tenant. If the Tenant objects to the revised base rental and notifies the Landlord of its objection in writing within fourteen (14) days of the receipt of the notice from the Landlord then the determination of the revised base rental shall be referred to a registered practising real estate valuer to be agreed upon by the Landlord and the Tenant or in the event of failure so to agree to a registered practising real estate valuer nominated by the President or other principal officer for the time being of the Australian Institute of Valuers. The appointed valuer shall determine the 4 UNREPORTED JUDGMENTS revised base rental by assessing the current annual market rental value of the demised premises as at the end of the relevant rent review period based on a Lease between a willing landlord and a willing tenant granted with vacant possession and taking no account of any goodwill attributable to the demised premises by reason of any trade or business carried on therein by the Tenant and the determination shall be made by the valuer acting as an expert only and not as an arbitrator and the decision of the valuer shall be final and binding upon the parties to this Lease. As and from the end of each rent review period the base rental shall be the larger of:- (a) the revised base rental notified by the Landlord or in the event of objection the revised base rental determined by the appointed valuer; or (b) the base rental payable immediately preceding the rent review period; and shall be subject to increase in accordance with this clause at the end of the next rent review period and otherwise as provided in this Lease and where appropriate shall become the base rental for the balance of any then current Lease Year. ARTICLE III: OUTGOINGS CONTRIBUTION 3.01 OUTGOINGS CONTRIBUTION The 'Outgoings Contribution' means in respect of each Outgoings Year a variable amount (to the nearest dollar) being either:- (a) if a percentage is stipulated in Item 3, that percentage of the Yearly Outgoings for that Outgoings Year, unless or until there has been a variation (the "Variation'') of the proportion which the lettable floor area of the demised premises bears to the lettable floor area of either the Building or of the area in respect of which any items comprised in the Yearly Outgoings are charged or incurred; or (b) if no percentage is stipulated in Item 3, or after the date of any Variation, the total of the amounts which bear the same proportion to the individual items comprised in Yearly Outgoings as the floor area of the demised premises bears to the lettable floor area of the respective parts of the Building in respect of which the respective items comprised in Yearly Outgoings are charged or incurred. 3.02 PAYMENT OF OUTGOINGS CONTRIBUTION The Tenant shall pay to the Landlord on account of the Outgoings Contribution on the days for payment of base rental the amounts which the Landlord may notify the Tenant in writing from time to time. 3.03 YEARLY ADJUSTMENT the outgoings contribution shall be determined as soon as practicable after the end of each Outgoings Year and if the amount thereof exceeds the amounts paid by the Tenant in respect thereof the deficiency shall be paid by the Tenant to the Landlord upon demand and if the amount thereof is less than the amounts paid by the Tenant in respect thereof the Landlord shall refund the excess of credit the excess against future payments pursuant to 13.02. ARTICLE IV: TENANT'S BUSINESS 4.02 PERMISSIBLE USE For the purpose of the covenants and provisions contained in the Memorandum which applies to this Lease the permissible use of the demised premises by the Tenant is specified in Item 5. ARTICLE VI: GUARANTEE 6.01 GUARANTEE For the purposes of the covenants and provisions contained in the Memorandum which applies to this Lease the Guarantor of this Lease the Guarantor of this Lease is the person stipulated in Item 7. WREYSHAM PROPERTIES PTY LTD v ACTION MOTOR GROUP PTY LTD and ORS (Powell JA) ARTICLE VII: OPTION 7.01 OPTION If the Tenant shall desire to take a renewed Lease of the demised premises for a further term of years being the term stipulated in Item 8 from the termination of this Lease and shall given to the landlord notice in writing of such desire not less than three (3) months nor more than six (6) months before the date of termination of this Lease and provided the Tenant is not then or on the date of termination of this Lease in default in the performance of the provisions of this Lease whether expressed or implied the Landlord will at cost of the Tenant grant to the Tenant a renewal of this Lease for such further term subject to the same covenants provisions and agreements as are contained in this lease and: (a) substituting for the words in Item 1 the following:- (i) for the first two years the rental established in accordance with cl2.03 hereof. (ii) for the second two years rental established in accordance with the appendix. (b) omitting cl7.01 and Item 8. (c) adding cl8.06 as follows:- 'Should during the term hereof the landlord determine to redevelop the land and Buildings of which the demised premises forms part it shall be entitled to terminate this Lease by giving at any time one year's notice to that effect." Schedule 3 (Appeal Book at 89) to the form of lease contained (inter alia) the following:- "ITEM 1 (2.01) BASE RENTAL: (a) For the first and second year $73,115.00 per annum (b) for the next two years the rent established in accordance with the Appendix. (c) For the final two years the rent established according to cl2.03 hereof. ITEM 2 (2.03) REVIEW PERIODS: See Item | hereof. ITEM 3 (3.01) PERCENTAGE OF YEARLY OUTGOINGS: Forty two percent. ITEM 5 (4.02) PERMISSIBLE USE: _ The business of a rent a car operation including ancillary office uses. ITEM 7 (6.01) GUARANTOR: ANTHONY GRAHAM CRESWELL of 28 Sydney Rd, East Lindfield. ANNETTE HELEN CRESWELL of 28 Sydney Rd, East Lindfield. ITEM 8 (7.01) OPTION PERIOD: Four years." Anthony Graham Creswell - who appears to have been the Managing Director - and Annette Helen Creswell - who, one assumes, was Mr Creswell's wife, and who, one assumes, was a director of Kezis, in addition to attesting the affixing of 6 UNREPORTED JUDGMENTS Kezis' Common Seal in their respective capacities as Director and Secretary, also executed the Form of Lease in the capacity of Guarantors. It would seem that, following upon the execution of the form of lease, Kezis entered into possession of that part of the property the subject of the form of lease - that part of the property was identified as being the area hatched black in a plan which was annexed to the form of lease and marked "A" - where it carried on a car rental business under the name of "Half Price Rent-a-Car". In October 1989, the Appellant, in pursuance of the provisions of cl2.03 in the pages attached to the form of lease notified Kezis of the revised base rental which it proposed. Kezis having objected to that proposal, a valuer was then appointed to determine what should be the revised base rental to be adopted - although it appears (see Appeal Book at 72) that such a determination was ultimately made, that does not seem to have occurred until April 1990, by which time the Appellant had re-entered and terminated the lease. On 1 November 1989, Mr Creswell wrote to Mr PB Evenden, the Managing Director of the Appellant, a letter (Appeal Book at 92) which, omitting formal parts, was as follows:- "Re: Assignment of lease, 16 Poplar Street, Darlinghurst NSW 2010 No doubt you are aware of our attempts to dispose of our leasehold interests in the abovementioned premises. Only limited interest has been shown in the premises but we have an expression of interest from Rapazag Pty Ltd trading as Action Suzuki and Audi of Sydney provided the rent review is resolved expeditiously. Further details of the Company are listed on the attached sheet. In accordance with PtXIV cl14.01 of memorandum V90003 we hereby request your written consent to the assignment of the remainder of the lease and option." (Rapazag Pty Ltd, of which the directors were Trevor Hunwick ("Mr Hunwick Snr.") and Rodney Darryl Hunwick ("Mr Hunwick Jnr."), the latter, together with Gwendoline Iris Hunwick - who appears to have been Mr Hunwick Snr's wife - being secretaries of the company, was the name under which the First Respondent had earlier been registered.) It is said that Kezis fell into arrears of rent from October 1989 onwards, which fact, coupled with Mr Evenden's inability to speak to Mr Creswell about the matter, apparently led Mr Evenden to determine that the Appellant should re-enter and terminate the lease. Having done so, Mr Evenden telephoned Mr Hunwick Jnr to inquire whether the First Respondent was still interested in obtaining a lease of the subject premises. When Mr Hunwick Jnr indicated that the First Respondent was still interested, Mr Evenden made arrangements to meet him (Mr Hunwick Jnr) on the site on 5 April 1990, before which day he (Mr Evenden) had made arrangements to have a locksmith enter the premises and change the locks. Mr Evenden and Mr Hunwick Jnr met at the site on 5 April 1990 at which time Mr Hunwick Jnr inspected the area which had been occupied by Kezis. Quite what happened after Mr Hunwick Jnr had completed his inspection of the premises is open to doubt, as there is a dispute between Mr Evenden and Mr Hunwick Jnr which Rolfe J apparently did not consider it necessary for him to resolve. Mr Evenden and Mr Hunwick Jnr appear to have met again on 18 April 1990, when a number of matters relating to the proposed lease appear to have been discussed. As was the case in relation to the meeting of 5 April 1990, there appear to be disagreements between Mr Evenden and Mr Hunwick Jnr as to what was the detail of those matters which were discussed, which differences Rolfe J appears not to have considered it necessary for him to resolve - it does not, however, seem to be disputed that, when Mr Evenden and Mr Hunwick Jnr WHEYSHAM PROPERTIES PTY LTD v ACTION MOTOR GROUP PTY LTD and ORS (Powell JA) parted, it was contemplated that Mr Evenden would prepare and forward to the First Respondent what was described as "Heads of Agreement". On 19 April 1990, Mr Evenden left with Mr Hunwick Jnr's secretary at the First Respondent's premises at 67 Flinders Street, Darlinghurst, a document (Appeal Book at 99-100) which, omitting formal parts, was in the following form:- "HEADS OF AGREEMENT COVERING LEASE OVER PREMISES AT 29A OXFORD STREET AND 16-18 POPLAR STREET Dear Sir, Subject to the terms set out below we offer premises at the above address in Darlinghurst:- THE PREMISES Self contained areas of 13,159.2 sq ft (1,222.53 m2) with an additional areal of 587.28 sq ft (54.56 m2) adjacent to the common car parking area, all as marked by cross-hatching on Plan 2 attached to the sample lease enclosed, together with right of way access between these areas and Poplar Street. THE LEASSEE (sic) Rapazag Pty Ltd, 74 Wentworth Avenue, Sydney. THE LESSOR Heysham Properties Pty Ltd 5 Sunnyridge Place, Bayview TERM Five years commencing Ist June 1990. OPTION PERIOD Five years commencing Ist June 1995. RENT Payable monthly in advance, in accordance with following two options:- (a) $138,000 pa gross (excluding power for lighting, ventilation etc) plus 42.5% of any increase in property outgoings over a base year ended 30th June 1990. (b) $104,000 pa net plus 42.5% of any increase in property outgoings. Estimated property outgoings for the year to 30th June 1990 are $80,000 of which 42.5% or $34,000 is payable by the lessee under this option. "RENT REVIEWS Annual review effective Ist July each year with increases based upon the greater of (a) the percentage increase in the index for the rental component of the CPI (Groups, Subgroups and Selected Expenditure Classes: Weighted Av 8 Cap Cities) for the March quarter over the prior year March quarter or (b) a 10% increase. For year 3 of the lease (and option period) the landlord has the option of reviewing the rent to market level for similar rental accomodation (sic) for any lawful use permitted by zoning and town planning requirement. USAGE Preparation and detailing of new vehicles, servicing of customer's (sic) vehicles, storage and sale of vehicle spare parts. ACCESS TO PREMISES Keys will be provided for access to the premises upon signing of this Heads of Agreement and payment of rental deposit. STATUTORY APPROVALS The premises are approved under DA 44 85 0598 dated 1.8.85 for use 'as a car rental business including an office, the storage of cars and minor maintenance work, all in accordance with submitted plans.' A spokesperson in the SCC Planning Department today confirmed to us that a change of use DA will not be required for your proposed operations. However you will be required to submit a DA for proposed signage and a BA for any proposed partitioning, alterations etc. PREPARATION OF PREMISES The Lessee undertakes at its own expense to prepare the premises for occupation including rubbish removal, painting, additional electrical work etc. Our solicitor assures us that no legal problems exist over removal and disposal of the wrecked car bodies from the premises. Easylift Transport (949 5449) will remove and dump four bodies at a time for $130. 8 UNREPORTED JUDGMENTS LESSEE'S CONSTRUCTION AND WORKS The lessee to seek approval and submit plans of all works to the lessor. The lessee to ensure that all works meet the requirements of any specific authorities. The lessor will not unreasonably withhold approval of lessee's specified works. The lessee, at the discretion of the lessor, may commence approved works at the premises upon completion of all aspects of this agreement. DEMOLITION CLAUSE The lessee acknowledges that the lessor may, at any time after 1.1.95 give notice of not less than one year of its intention to resume the premises for redevelopment. CORPORATE STATEMENT Lessee to provide 1988,89 financial statements for Rapazag. GUARANTEES Personal guarantees to be provided by directors of Rapazag. SOLICITORS For lessee: - Mr Peter Cassinatas (sic) (Phone 331 6244) For lessor: - Mr Lynton Hooper of Hopper-Serisier (Ph 982 7091). CONSIDERATION A rental deposit of $11,500 to be credited against rent from the commencement of the lease term is payable to the lessor upon completion of this agreement by the directors of Rapazag Pty Ltd. Two copies of the Heads of Agreement submitted for completion, please return the signed copy together with deposit to the above address. Yours faithfully, For and on behalf of Rapazag P/L we accept the terms and conditions set out above and instruct Heysham Properties P/L to arrange prepar- ation of a Lease document. PB Evenden for Heysham Properties Pty Ltd." Attached to that document, when delivered to Mr Hunwick Jnr's secretary, was a copy of the Kezis lease. However, it would seem that no copy of Memorandum Registered No V90003 was provided at that time. Despite the fact that, by that time, the First Respondent had not returned to Mr Evenden a signed copy of the document which he had delivered on 19 April 1990, and had not provided the "rental deposit", it would seem that, by late April, or early May, 1990, the keys of the subject premises had been made available to the First Respondent and the First Respondent had gone into possession of the subject premises. On 1 June 1990, the First Respondent's solicitor, Mr Cassimatis, wrote to the Appellant, a letter (Appeal Book at 101) which, omitting formal parts, was as follows:- "RE: LEASE TO MARQUE AUTOMOBILES PTY LTD 29A OXFORD STREET AND 16-18 POPLAR STREET We refer to the various telephone conversations with your Mr Evenden and enclose: 1) Heads of Agreement duly executed by Mr R Hunwick of our client Company. 2) Cheque in the sum of $11,500.00 being the first months rent. We await the lease documents." It should be noted that, on the copy of the Heads of Agreement which was returned to the Appellant, there appeared a number of alterations or notations, they being:- 1. the name of the "Leasee" had been struck through and there had been written the words "Marque Automobiles Pty Ltd", that being the name which the First Respondent had adopted in October 1989; WREYSHAM PROPERTIES PTY LTD v ACTION MOTOR GROUP PTY LTD and ORS (Powell JA) 2. adjacent to the matter appearing under "rent" there had been written the words "Which one", and there had been placed adjacent to the matter under "(a)" an asterisk and an arrow; 3. in the matter under "solicitors" the spelling of Mr Cassimatis' name had been corrected and there had been added "Peter J Cassimatis and Co"; 4. in the matter under "Consideration" the words "Rapazag Pty Ltd" had been struck through and there had been substituted "Marque Automobiles Pty Ltd"; 5. where provision had been made for the acceptance by the First Respondent, the matter "Rapazag P/L" had been struck through and there had been substituted "Marque Automobiles P/L". On 29 June 1990, the Appellant's solicitors wrote to the First Respondent's solicitors, a letter (Appeal Book at 104) which, omitting formal parts, is as follows:- "RE: HEYSHAM PROPERTIES PTY LTD LEASE TO MARQUE AUTOMOBILES SYDNEY PTY LTD We enclose herewith Lease in triplicate and our memo of fees. The document is incomplete in that the heads of agreement containing a sketch of the relevant area which is the only effective way of incorporating the description in the lease is incomplete. We are waiting for a copy of the sketch so that it can be incorporated. The Lease is submitted to you for consideration and any necessary discussion and we emphasise that our client company has yet to consider the document and give its approval, and we reserve the right on behalf of our client to make any necessary alterations to accord with its instructions and the heads of agreement. So far as our memo is concerned, we note that the costs are to be agreed between ourselves and your client, through you. We note the costs of $100,000.00 are $1,307.00 and that the scale at that point is increasing by $9.00 per $1,000.00. We have halved this rate." The form of lease (Appeal Book at 195 ff), which had been forwarded under cover of the letter of 29 June 1990 to the First Respondent's solicitors, had not been returned by 19 February 1991, on which day the Appellant's solicitors wrote to the First Respondent's solicitors a letter (Appeal Book at 224-225) which, omitting formal parts, was as follows:- "re: Heysham Properties Pty Ltd lease to Marque Automobiles Pty Ltd - Part Ground Floor and Lower Ground Floor 29a Oxford Street and 16-18 Poplar Street, Darlinghurst. We refer to our letter of the 29th June last and to our subsequent conversation with you and advise that we have made certain alterations to the lease on our client's instructions as follows: 1. The Torrens Title reference has been changed; 2. Article 1.01 has had the date inserted; 3. Article 2.03 has had some variations made in regard to valuation and as to the cost of the valuation; 4. Article 8.04 has been amended to give your client the right forthwith to approval of its signs; 5. Article 8.05 has been altered setting a date; 6. The Appendix part 'A ' has been corrected. 7. The Appendix Part "B' has been simplified. We have also competed item 6 of Schedule Three and inserted some names in item 7 and a period of time in item 8. Would you please provide the addresses for the Guarantors and names and addressed of any further directors, and arrange for them to execute the Lease on the guarantee page. There have been some typographical errors corrected as well. 10 UNREPORTED JUDGMENTS Our client has instructed us to obtain from your client pursuant to the Heads of Agreement copies of current financial statements for the Lessee which are to be provided prior to execution by your client of the Lease." It should be noted that, among the alterations which had been made to the form of lease, one related to the names of the persons to be identified as guarantors - in the earlier form of lease only the names of Mr Hunwick Snr and Mr Hunwick Jnr - they being the only directors of the First Respondent - had been included, while in the form of lease forwarded in February 1991, Mrs Hunwick's name was added, despite the fact that, as I have earlier recorded, Mrs Hunwick, although a secretary, was not a director, of the First Respondent. Despite the fact that, on 26 April 1991, the Appellant's solicitors had written to the First Respondent's solicitors, a letter (Appeal Book at 235) in the following terms:- "re: Heysham Properties Pty Ltd lease to Marque Automobiles Pty Ltd - Part Ground Floor and Lower Ground Floor 29a Oxford Street and 16-18 Poplar Street Darlinghurst We refer to our conversation with Mr Cassimatis on the 15th instant and confirm also our request that the executed lease and fees and disbursements be returned to us as a matter of urgency." the form of lease, which had been forwarded to the First Respondent's solicitors in February 1991, had not been returned to the Appellant's solicitors by 16 May 1991, on which day the Appellant wrote to the First Respondent a letter (Appeal Book at 151) in the following terms:- "Re: Lease over premises at 29A Oxford Street 16-18 Poplar Street, Darlinghurst Dear Sir In accordance with the lease terms, I am writing and advise you that the rent for the second year of the lease period, commencing on Ist June 1991, is to be increased by 10% from $138,000 to $151,000 payable in twelve equal monthly amounts of $12,650 by the first day of each month." Although - since there appears to be a dispute between Mr Evenden, on the one hand, and Mr Hunwick Jnr, on the other hand, as to what was said at a meeting held not long after 16 May 1991, which dispute Rolfe J did not appear to have considered it necessary for him to resolve - one cannot be sure that this was so, it would appear at least likely, even if not probable, that the reason why, despite the long delay, no formal lease had been executed, was that, the subject premises had, for a variety of reasons, proved to be unsuitable for what had been the use intended by the First Respondent. Notwithstanding the terms of the Appellant's letter of 16 May 1991, the First Respondent, so it would seem, did not pay the increased rental demanded, but continued to pay rental at the rate originally contemplated. On 26 July 1991, the First Respondent's solicitors wrote to the Appellant's solicitors, a letter (Appeal Book at 153) which, omitting form parts, was as follows:- "RE: Marque Automobiles Pty Ltd lease from Heysham Properties Part Ground Floor and Lower ground (sic) Floor 29a Oxford Street, and 16-189 Polar (sic) Street Darlinghurst WREYSHAM PROPERTIES PTY LTD v ACTION MOTOR GROUP PTY LTD and ORS (Powell JA) We refer to the lease in the above matter and are instructed to advise that recently the premises were visited by a member of the local Council. The Officer was inspecting the ventilation of the Building. Our clients were informed verbally that your client had received a Notice from the Council to improve the ventilation of the building. The officer further stated to our clients that the work done by your client in response to that notice is not satisfactory and there is a possibility that the Council's Health Department may order that the building be closed. Furthermore our client has instructed us that when it rains the lower ground floor floods. The drainage system of the property cannot cope with the water flow from the lane, and as a result the building gets flooded. Our clients cannot carry on their business of servicing their cars, customer cars, storage of spare parts etc. We are instructed that our clients are not prepared to spend money in furbishing and other things on the premises if the Council or any other authority is threatening to close down the building. Accordingly we are instructed to request that the above be attended to urgently. We are instructed to advise that unless the premises are made fit for the purpose for which they are to be used our clients will be left with no option but to give the required notices of their intention to vacate. We await your reply." Thereafter, on 27 September 1991, the First Respondent's solicitors, wrote to the Appellant's solicitors, a letter (Appeal Book at 145) which, omitting formal parts, is as follows:- "RE: Marque Automobiles Pty Ltd and Heysham Properties Pty Ltd Premises: Part 16-18 Poplar Street, Darlinghurst. NOTICE OF VACATING PREMISES: We hereby give notice that Marque Automobiles Pty Ltd to not accept the terms and conditions outlined in the draft lease and accordingly will not execute the lease documents. The lease submitted is not in accordance with the Heads of Agreement dated 18th April, 1990. Marque Automobiles Pty Ltd refuse to accept the terms and conditions in the draft lease on the basis that the disclosed use of the premises are unlawful. Accordingly Marque Automobiles hereby give notice that it will vacate the premises at the expiration of one (1) calendar month from the date of service of this notice upon you." to which letter the Appellant's solicitors replied on 31 October 1991 in a letter (Appeal Book at 146-147) which was in part as follows:- O eveeeeeeees Your client and yourselves are well aware that your client is a party to an agreement by way of Heads of Agreement which has been signed by all parties ant that the lessor has tone all things necessary to fulfil its obligations under those Heads of Agreement. It is noted that your client complains about a problem within the premises in relation to the Sydney City Council which can only largely be attributed to activities of your client in the use of the building and in particular the erection of certain facilities. 12 UNREPORTED JUDGMENTS Our client instructs us that it holds your client to the terms of the Heads of Agreement and looks to it to maintain its rental payments in full and on time and in accordance with the Heads of Agreement and Lease submitted until such times as our client is in a position to replace your client as tenant and thereby mitigate the further loss that will be incurred. If your client chooses to remain in the premises, our client will accept it on condition that it remain under the terms of the agreement already reached and sign the Lease and pay all costs and stamp duties appropriate thereto and our client undertakes to execute the Lease immediately it is returned to us. Please be advised that our client will hold your client responsible for the performance of all the covenants contained in the Lease ensuring at all times that our client in no way incurs any loss as a result of your client's default." On 4 November 1991, the First Respondent's solicitors wrote to the Appellant's solicitors a letter (Appeal Book at 148) which, omitting formal parts, was as follows:- "RE: Marque Automobiles Pty Ltd - and Heysham Properties Pty Ltd - Part 16-18 Poplar Street, Darlinghurst. We acknowledge receipt of your letter dated 31st October, 1991 which was faxed to us on the same date and are instructed to reply as follows:- The contents of your letter have been discussed with our client and we are instructed to advise that our client relies on the contents of the Notice to Vacate, particularly that the lease submitted is not in accordance with the Heads of Agreement." It would seem that the First Respondent vacated the premises on 24 November 1991, all rent and outgoings up to the end of November 1991 being paid. On 24 January 1992, the First Respondent's solicitors wrote to the Appellant's solicitors a letter (Appeal Book at 240) which, omitting formal parts, was as follows: "RE: Marque Automobiles Pty Ltd and Heysham Properties Pty Ltd Premises: 16-18 Poplar St, Darlinghurst We have been instructed that your client has refused to accept the keys to the above premises despite a number of attempts by our client to return the same. The last attempt by our client to return the keys was this day by courier and your client refuses to accept the keys. Accordingly we are instructed to forward the keys to the above premises to your office as you are the Solicitors for Heysham Properties Pty Ltd. Please acknowledge receipt of the same by signing dating and returning the enclosed copy of this letter." On the same day, the Appellant's solicitors wrote to the First Respondent's solicitors a letter (Appeal Book at 241) which, omitting formal parts, was as follows:- "re: Heysham Properties Pty Ltd lease to Marque Automobiles Pty Ltd - Part 16-18 Poplar Street and 29A Oxford Street, Darlinghurst. We have been instructed that the tenant has vacated the above premises and has failed to pay rent for a substantial time. Such action by it is a clear breach of the company's obligations under the Lease and is a repudiation of the Lease. Your client today attempted to return the keys to the Lessor but was not prepared to sign an acknowledgment that the keys were to be accepted by the Lessor without prejudice to the Landlord's rights against the tenant. Our client accepts the Lessee's repudiation and hereby terminates the Lease. Would you WHEYSHAM PROPERTIES PTY LTD v ACTION MOTOR GROUP PTY LTD and ORS (Powell JA) please arrange for the return of the keys to this office. Are you instructed to accept service of any process? Although the material which is before the Court does not demonstrate that this was so, the probability is that these proceedings were commenced shortly thereafter. In the Amended Summons which was filed on 24 April 1992, the nature of the dispute was described in the following terms (Appeal Book at 2-3):- "The Plaintiff claims against the First Defendant damages for loss it has suffered as a result of the First Defendant's repudiation of its lease dated 18th April, 1990 of premises 29A Oxford Street and 16-18 Poplar Street, Darlinghurst or alternatively the First Defendant's repudiation of the Heads of Agreement. The Plaintiff's claim against the Second, Third and Fourth Defendant arises out of a guarantee and an indemnity given by each of those Defendants to the Plaintiff under the lease, or alternatively whereby the Second and Third Defendants guaranteed the performance of the First Defendant's obligations under the Heads of Agreement." The summary of the Appellant's contentions (Appeal Book at 3-6) set out in that Amended Summons contained (inter alia) the following:- "2. During June, 1990 the Plaintiff and the First Defendant by their respective servants and agents executed a document entitled 'Heads of Agreement' (the Heads of Agreement) and dated 18 April, 1990. 3. Under the Heads of Agreement the Plaintiff and the First Defendant agreed to enter into a lease of certain property more particularly described therein and being part of the premises at 29A Oxford Street and 16-18 Poplar Street, Darlinghurst ("the premises"). 4. It was a term and condition of the Heads of Agreement that the Second, Third and Fourth Defendants, being the then directors of the First Defendant, would guarantee the payment of any moneys due and owing by the First Defendant to the Plaintiff under the terms of the Heads of Agreement. 5. In the week commencing 7th May, 1990 the First Defendant pursuant to the provisions of the Heads of Agreement entered into possession of the premises but subsequently failed to execute the lease prepared and submitted to it by the Plaintiff. 6. On 24th November, 1991 the First Defendant vacated the premises having never executed the lease and subsequently returned the keys to the premises to the Plaintiff. 7. The actions of the First Defendant were a repudiation of its obligations under the Heads of Agreement as a result whereby the Plaintiff has suffered loss and damage. 8. Further and in the alternative on 29th June 1990 and after the Heads of Agreement were executed, the Plaintiff prepared a lease of the premises and forwarded it to the First Defendant for execution thereof by each of the Defendants. 9. The Lease was for such period up to 31st May, 1995. 10. The lease was subject to the provisions of memorandum V090003 (sic) lodged with the Land Titles Office. 11. The Second, Third and Fourth Defendants pursuant to cl20 (sic) of Memorandum V090003 (sic) guaranteed the due and punctual performance by the First Defendant of its obligations under the lease and further indemnified the Plaintiff against all loss, damage, costs ant expenses suffered or incurred by the Plaintiff as a result of any failure of the First Defendant to pay any moneys under the lease or any other breach of any covenant. 14 UNREPORTED JUDGMENTS 12. On the 7th May, 1990 the First Defendant moved into possession of the premises and commenced paying the rent of $138,000 per annum by equal monthly instalments of $11,500 per month, such rent being for the period to 31 May, 1991. 13. The Defendants and each of them respectively failed and have, despite request by the Plaintiff, failed to execute the lease and the guarantee and indemnity therein. 14. The actions of the Defendants and each of them constituted part performance of the provisions of the lease. seeeeeeees 18. On 24th November, 1991 the First Defendant vacates possession of the leased premises and subsequently on 28th January, 1992 returned the keys of the premises to the Plaintiff. 19. By its actions the First Defendant has repudiated the lease and its obligations thereunder. 20. The Plaintiff accepted the First Defendant's repudiation and terminated the lease." When the proceedings came on for hearing before Rolfe J on 19 October 1992, there was handed to his Honour a document entitled "Agreed Issues", which document, so far as is relevant, contained the following:- "1.___ Whether in respect of part of the premises 16-18 Polar (sic) Street, Darlinghurst and 29A Oxford Street, Darlinghurst ('the premises' ):- (a) There was an agreement between the Plaintiff, and Kezis Pty Ltd for an assignment of the lease between the Plaintiff and Kezis Pty Ltd to the First Defendant or whether the lease to the First Defendant would contain all the terms and conditions of the lease between the Plaintiff and Kezis Pty Ltd. (b) The document entitled "Heads of Agreement" dated 18 April, 1990 between the Plaintiff and the First Defendant constituted a valid and binding agreement for lease. (c) The First Defendant's actions constituted sufficient acts of part performance for the Court to find that the Plaintiff and the First Defendant entered into a valid and binding lease. (d) Did the provision (sic) of s127 Conveyancing Act apply in the circumstances? 2.____ Did the Second and Third Defendants guarantee the obligations of the First Defendant under the agreement for lease as contained in the document "Heads of Agreement' or weather the Second, Third and Fourth Defendants guaranteed and indemnified the obligations of the First Defendant under the lease? 3.____ As the lease was not registered does the effect of the decision in Chan and Anor v Cresdon Pty Ltd (1989) 168 CLR 242 mean that the Plaintiff cannot succeed against the Second, Third and Fourth Defendants pursuant to the guarantee and/or indemnity? 7.____ Were the actions of the First Defendant in vacating the premises a repudiation of the agreement for lease or lease itself? 8.____ The quantum of the Plaintiff's damages." The transcript record of proceedings for 19 October 1992 concludes with the notation: "(Discussion ensued between his Honour and counsel for the Plaintiff as to the Heads of Agreement and the effect of Masters v Cameron)" WAEYSHAM PROPERTIES PTY LTD v ACTION MOTOR GROUP PTY LTD and ORS (Powell JA) The notation to which I have just referred, coupled with the passages in Rolfe J's Judgment to which I will next refer, would suggest that, despite the form of the "Agreed Issues", the Appellant's case at the hearing had become more refined by the time the evidence had been concluded. In the first of those passages, Rolfe J wrote (Appeal Book at 324): "\.. the plaintiff submits that the Heads of Agreement, read with the lease to Kezis and the memorandum referred to in that lease, insofar as they were not inconsistent with the Heads of Agreement, constituted a binding contract within the second category referred to by the High Court in Masters and Anor v Cameron (1954) 91 CLR 353 at 360, ie one in which 'the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which these agreed terms express or imply'." while in the second of those paragraphs, Rolfe J, after referring to paral(b), para3 of the "Agreed Issues" wrote (Appeal Book at 329):- "There were a number of other questions asked to which I shall only find it necessary to refer if I come to a conclusion adverse to the defendants on what, ultimately, became the main point in issue between the parties, namely whether the Heads of Agreement, the lease to Kezis and the memorandum constituted a binding agreement. This was the critical issue, as matters transpired, although the pleadings raises a number of others." Later in his Judgment, Rolfe J having referred to a number of matters wrote (Appeal Book at 335-336): "In my opinion the matters to which I have referred show the problems confronting the plaintiff in trying to create a binding agreement out of these documents. In the end the plaintiff had to conduct such a case. However, the more it is examined the more obvious it becomes that there was not a concluded agreement but that the parties remain in negotiation. These matters, together with the correspondence between the parties, indicate to me that the parties did not intend, viewed objectively, to reach any concluded agreement by virtue of the Heads of Agreement, Kezis lease and the memorandum. The matters to which I have pointed indicate, quite clearly, in my opinion, that one could not spell out from them any concluded agreement arising from those documents, even allowing for the concession made on betray of the plaintiff that the Heads of Agreement should take precedence over the other documentation. In all these circumstances I am satisfied that the parties never entered into any concluded agreement." Later again, Rolfe J wrote (Appeal Book at 337-338): "Accordingly, the tenancy was one governed by s127(1) of the Conveyancing Act 1919 and was duly terminated by notice given by the solicitors for the defendants. Even if my conclusion as to the existence of a concluded agreement is not correct the guarantee and indemnity for which the plaintiff contends is to be found in cl20.01 of the memorandum in the following terms:- "GUARANTEE AND INDEMNITY Where a Guarantor has executed the Lease then such Guarantor in consideration of the landlord entering into the Lease at the Guarantor's request GUARANTEES to the Landlord due and partial (sic) performance by the Tenant of the obligations on its part to be performed under the Lease and INDEMNIFIES and agrees to indemnity the Landlord against all loss damage costs and expenses suffered or incurred by the Landlord as a result of any failure by the Tenant to pay any moneys under the Lease or any breach by the Tenant of any of the covenants and conditions contained or implied in the Lease..." It is to 16 UNREPORTED JUDGMENTS be noted firstly that there must be an execution of the lease by the guarantor before any liability arises under cl20.01. This, in my opinion, merely confirms the understanding of the parties that the lease would not come into existence until the execution of a document. It is then necessary to note that the guarantee and indemnity clause each relate to matters arising 'under the Lease' or 'contained or implied in the Lease'. The guarantee and indemnity clause is, save for the words 'where a Guarantor has executed the Lease then such', and the words 'the Lease' in lieu of 'this Lease', in the same terms as that considered by the High Court in Chan and Anor v Cresdon Pty Ltd (1989) 168 CLR 242. In my view the present case is, on the assumption that there was an agreement in the terms for which the plaintiff contends, in the same position as that considered in Chan. Therefore, even if I had come to the view that there was an agreement in the terms submitted by the plaintiff I would, conformably with the reasoning in Chan, have held that there was a common law tenancy created by the entry into possession and payment of rent. In the result the first defendant could terminate on the giving of the requisite notice and there would be no obligation on the second, third and fourth defendants as guarantors save, perhaps, in relation to that tenancy. It is unnecessary to consider the position of the fourth defendant, because it was conceded she was never a director of the first defendant and, therefore, was in no way liable in any event." Accordingly, his Honour dismissed the proceedings with costs. In the Notice of Appeal that was filed on its behalf, the Appellant took the following grounds of appeal:- "1 His Honour erred in holding that there was no concluded agreement for a lease between the Appellant ant the First Respondent. 2. His Honour erred in not finding that the heads of agreement between the Appellant and the First Respondent, coupled with the lease enclosed constituted a binding contract within the first or second category of Masters v Cameron (1954) 91 CLR 353. 3. His Honour erred in failing to find that the signature of Rodney Hunwick on the Heads of Agreement was also a signature on his own behalf in the giving of a guarantee. 4. His Honour erred in finding that the First Respondent did not intend there to be a final agreement. 5. His Honour erred in attaching significance to the difference in the wording on the one hand of the 'Kezis' lease and the heads of agreement and on the other with the lease as sent to the First Respondent's Solicitor. 6. His Honour erred in holding that the circumstances of this case were such that the decision of Chan v Creston (1989) 168 CLR 242 was applicable and in consequence thereof that the second and third respondents were not liable as guarantors pursuant to the provisions contained in the heads of agreement and the Kezis lease. 7. His Honour erred in failing to draw any distinction in the facts of Chan v Cresdon to the present case in that in the case under appeal the default in registration of the lease was caused by the failure of the First Respondent to execute and return the lease submitted to it to the Appellant." When the appeal came on for hearing, Mr DMJ Bennett QC appeared with Mr DL Warren for the Appellant, while Mr AT McInnes QC appeared with Mr WN Marks for the Respondents. WHEYSHAM PROPERTIES PTY LTD v ACTION MOTOR GROUP PTY LTD and ORS (Powell JA) Despite the basis upon which the matter appears to have been conducted on behalf of the Appellant at the hearing before Rolfe J, despite the form of the Grounds of Appeal and despite the form of the Written Submissions which had earlier been filed on behalf of the Appellant, Mr Bennett opened the appeal by informing the Court (Transcript at 1):- "This is a case in the fourth category of Masters v Cameron. That is the category where parties intend to be immediately bound but also intend and may indeed agree to have a further agreement with additional and perhaps different terms." (the reference to "the Fourth category" being based on what was said by McLelland J (as his Honour then was) in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd!; see also Sinclair Scott and Co Ltd v Naughton2). In the course of developing that submission, Mr Bennett put, first, that the agreement between the parties, upon which the Appellant sought to rely, was the signed Heads of Agreement, the Kezis Lease not being incorporated by reference (Transcript at 2); and, as "'a fall back position", that such of the provisions of the Kezis Lease as were not inconsistent with the signed Heads of Agreement were incorporated by reference into the signed Heads of Agreement (Transcript at 2). I do not consider that the argument now sought to be advanced on behalf of the Appellant - which argument, so it seems to me, represents an attempt to persuade the Court, when seeking to determine whether or not the Heads of Agreement represent a concluded agreement for a lease or but a basis for an agreement for a lease, to disregard what was said and done after 18 April 1990 - should now be entertained and the Appellant should be held bound by the way in which its case was conducted on the hearing before Rolfe J. (see, for example, Coulton and Ors v Holcombe and Ors3; Water Board v Moustakas'). But even if the argument now sought to be advanced on behalf of the Appellant be entertained, I would not be disposed to accept it. Where, as here, a concluded agreement is alleged to be found in a written and signed document, notwithstanding that the document contemplates further agreement, including, inter alia, further terms and conditions, it is open to the Court which is called upon to determine that question to have regard to extrinsic evidence of surrounding circumstances for the purpose of determining objectively whether there was an intention that there should be a concluded agreement (see, for example, Codecke v Kirwan; Allen v Carbone®; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales'; Air Great Lakes Pty Ltd and Ors v KS Easter (Holdings) Pty Ltd8). The matters which lead me to the view that the Heads of Agreement did not represent a concluded agreement for a lease are: 1. the premises the subject of the proposed lease were commercial premises; 2. the proposed term for the lease was 5 years, with an option in the First Respondent - the conditions of the exercise of which option were not defined - for a further term of 5 years; 1. (1986) NSW Conv R 55-299, 56, 786; affd. (1987) NSW Conv R 55-324, 56, 981 2. (1929) 43 CLR 310, 317 3. (1986) 162 CLR 1,7 4. (1988) 180 CLR 491, 497 5. (1973) 129 CLR 629, 638 6. (1975) 132 CLR 528, 531-532 7. (1982) 149 CLR 337, 352 8. (1985) 2 NSWLR 309, 334, 337-338 18 UNREPORTED JUDGMENTS 3. the proposed rent - which rent was subject to two types of review - was substantial; 4. a contribution to "property outgoings" or to the increase in "property outgoings" was to be payable; 6. personal guarantees of some, or all, of the First Respondent's obligations were to be provided by the directors of the First Respondent; 7. the existence of registered Memorandum No V090003 and the Lease to Kezis would indicate that the Appellant was accustomed to incorporate into any lease of its property detailed provisions of the type incorporated in the registered Memorandum and of the type set out in Schedule 2 to the Kezis Lease; 8. except to the extent to which the signed Heads of Agreement provide for terms of the proposed lease, the Heads of Agreement, if intended to have been binding on the parties, were no more than an open contract for a lease; 9. although the question of the covenants to be contained in a lease is a matter of considerable importance to both a lessor and a lessee, the covenants which the law implies, or which, in a suit for specific performance of an agreement to grant, or to take, a lease, a party would be entitled to have included in a lease settled by the Court, are very limited indeed; 10. in the light of these matters, it is improbable, in the extreme, that the Appellant would have committed itself to the grant of a lease which contained only the covenants that would normally be implied, coupled with such covenants as might give effect to the particular terms set out in the Heads of Agreement; 11. further, it is clear that the provision of a guarantee of some, or all, of the First Respondent's obligations under the proposed lease was a matter of some importance to the Appellant, despite which fact the directors of the First Respondent were not parties to the Heads of Agreement, the signature by Mr Hunwick Jnr clearly being made in his capacity as the agent of the First Respondent and not in the capacity of a director giving his personal guarantee, or as agent for Mr Hunwick Snr to give his guarantee, of such of the obligations of the First Respondent as were to be guaranteed; 12. finally, the form of the two forms of lease submitted by the Appellant's solicitors to the First Respondent's solicitors, in my view, indicated that the Heads of Agreement did not represent a concluded agreement for a lease, but represented only a basis for a proposed lease. As the Appellant conceded (see Transcript at 18) that, if the Court were of the view that there were no concluded agreement for a lease, the question of the liability, if any, of the Messrs Hunwick on the alleged guarantee does not arise, it is, in my view, unnecessary further to consider that question. For these reasons I would propose that the appeal be dismissed with costs. Representation: Counsel for the Appellant: DMJ Bennett QC and DL Warren Solicitors for the Appellant: Hopper-Serisier (Dee Why) Counsel for the Respondents: AT McInnes QC and WN Marks Solicitors for the Respondents: Peter J Cassimatis and Co (Kingsford)