HALL and ORS v NATIONAL MUTUAL LIFE NOMINEES LTD [1998] NSWCA 100

HALL v NATIONAL MUTUAL LIFE NOMINEES LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MASON P, PRIESTLEY and BEAZLEY JJA 20 February 1998, 11 June 1998

[1998] NSWCA 100

INTERPRETATION OF COMMERCIAL LEASE — Whether "outgoings" included in "rent".

In a lease of commercial premises tow individuals, pursuant to cl15 of the lease, agreed, as "covenantors" that they would be jointly and severally liable with the lessee to the lessor for rent and other moneys payable under the lease. The lessor agreed to release the two individuals from their obligations once the lessee had paid $750,000 in rent. The tow individual convenors in proceedings against the lessor claimed, on the basis that payment of "rent" in cl15 included payment of various outgoings, that more that $750,000 had been paid to the lessor and that they were thus released from their obligations under the clause. The lessor, disputing that payment of the outgoings should be counted in the calculation of rent paid, asserted $750,000 had not yet been paid, and that the covenantors remained liable. Both a referee and Bryson J concluded that the language of the lease mate "'a clear distinction between the rent and outgoings", and that the covenantors remained liable.

On appeal the appellant submitted: The payment of rent in cl15 included the payment of outgoings under the lease because: (a) the word "rent' was not defined in the lease thereby allowing the court to adopt the modern common law meaning which (they said) included outgoings; (b) "annual rent" referred to in cl19, when read with cl20 (both in the First Appendix), was fixed so as to include rent and a proportion of the outgoings, ant (c) Heads of Agreement made before the lease supported the appellants' construction.

Held: 1. As "rent" has a variety of meanings in differing legal and commercial contexts, the precise meaning here depended on the language in the lease; 2 in cl20 and cl21 of the First Appendix, "rent: and "outgoings" were treated quite separately, a distinction made clear by cl3 of the lease; the other matters of construction relied on by the appellants did not detract from the meaning shown by theses three clauses; and the Heads of Agreement, other than assisting in understanding the terms used between the parties in the subsequent lease, were not of material assistance in construing cl15 of the lease.