TSAOUCIS AND ANOR v GALLIPOLI MEMORIAL CLUB LTD [1998] NSWCA 238

TSAOUCIS v GALLIPOLI MEMORIAL CLUB LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MASON P, HANDLEY and STEIN JJA 9 July 1998, 9 July 1998

[1998] NSWCA 238

LEASE — OPTION TO RENEW — WHETHER PURPORTED EXERCISE EXPRESSED WITH CLEAR AND UNAMBIGUOUS INTENT

Mason P The appellants were the lessees of part of the premises at 12/14 Loftus Street which were primarily occupied by the Gallipoli Club. The lease is in the form of a Memorandum of Lease capable of registration under the Real Property Act, but was not registered. Nevertheless it clearly operated as a contract. The appellants occupied part of the premises as a restaurant and take-away food outlet. The term of the lease was from a date in 1993 expiring on 25 April 1997. The appellants were partners in the business. The lease contained two options to renew for periods of "four and three years". When one turns to Pt11 of the annexure, to which reference is made on the front page of the Lease, the statement is:

"Ptl1: Option of Renewal, 2 (two) Options of 4 (four) Years and 3 (three) Years respectively.

Proceedings were commenced on 12 March 1998. The appellants claimed by summons a declaration that the lease agreement required rectification (we are no longer concerned with that) and a declaration that the appellants had duly exercised the option for renewal of the lease to which I have referred.

On 26 April 1998 a Notice to Quit expired. The appellants had been holding-over since 25 April 1997. The issue that was fought before Young J was whether there had been a valid exercise of the option of renewal and that in turn split into three sub-issues. Firstly, whether the lease and s170 of the Conveyancing Act required the option to be exercised in writing. Secondly, whether in any event it had been duly exercised in the conversation that is relied upon. Thirdly, whether the first appellant, who had purported to exercise the option on the appellants' contention, had authority from his partner to do so. Although all three issues are involved in this appeal we have stopped Mr Larkin, counsel for the respondents, at a stage when he was developing his submissions in the second issue alone.