LEASK v FARLMIST PTY LTD [1998] NSWCA 283

LEASK v FARLMIST PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

SHELLEY, BEAZLEY JJA and FITZGERALD AJA 5 November 1998, 18 December 1998

COMMERCIAL LEASE — terms of lease — rent holiday period to be taken into account

This appeal concerned the lease of commercial premises owned by the respondent in Erina. The appellant entered into negotiations with the real estate agent to lease the premises for a shop selling cane products. That use was prohibited by the then current zoning and it was necessary to lodge a development application with Gosford City Council. The appellant claimed that the real estate agent assured them the change in zoning was "just a paper entry at council" and he would take care of it. The agent filled out an application and lodged it with Council on the appellant's behalf.

The terms of the proposed lease as outlined in a Commercial Lease Advice and correspondence between the appellant and the respondent's solicitors included rental at $8,500 per month, a term of 3 years with a 3 year option commencing on 18 February 1994 with a 3 months rent holiday and that the lease was subject to Council consent. The appellant paid one months rental in advance and occupied the premises on or about 18 February 1994, before Council consent had been given. On 10 May 1994 the appellant was advised that Council consent would be granted subject to the payment of a car parking contribution which the respondent was prepared to pay. After receipt of a letter of demand for rental due date 22 June 1994, the appellant vacated the premises on 27 July 1994.

The trial Judge held that when the appellant had occupied the premises he had done so as a monthly tenant at rental of $8,500 a month, the lease for a 3 year term had never been entered into because Council consent had never been granted, the respondent was therefore entitled to rent from 18 February 1994 27 July 1994 and the appellant was entitled to the $8,500 paid in advance.