Reported Decision : [2000] 10 BPR 18,001 [2001] NSW ConvR 55-982 New South Wales Court of Appeal CITATION : Goldana Investments Pty Ltd v Amberdown Pty Ltd [2000] NSWCA 46 FILE NUMBER(S) : CA 40676/99 HEARING DATE(S) : 15/02/00 JUDGMENT DATE : 16 March 2000 Goldana Investments Pty Limited (Appellant) PARTIES : Amberdown Pty Limited (First Respondent) Trung Hung Luong (Second Respondent) JUDGMENT OF : Priestley JA at 1; Beazley JA at 2; Fitzgerald JA at 3 LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT ED 2640/99 FILE NUMBER(S) : LOWER COURT Bergin J JUDICIAL OFFICER : COUNSEL : J.C. Kelly SC / V. Kerr (Appellant) G.C. Lindsay SC / J.E. Armfield (1st Respondent) Phillip Anthony Biber (Appellant) SOLICITORS : C.P. White & Sons (Burwood) (1st Respondent) Davidson James & Associates (2nd Respondent) CATCHWORDS : Lease of retail shop - Leases - whether "photographic store and processing agency" is included in permitted use - whether another shop has been leased with the same permitted use in breach of the lease - what is the appropriate term of relief DECISION : Appeal allowed in part. Injunction granted by the trial judge restraining registration of the lease of shop 22 and her Honour's order for an inquiry as to the damages sustained by the first respondent by reason of the grant of that lease set aside.; Appeal otherwise dismissed. However, form of the orders which the trial judge made to protect the first respondent's use of the minilab in shop 9 varied as follows; The orders below are set aside and the following orders made:; "(a) The Court declares that; (i) Upon the true construction of Lease Registered No. 0313916:; (a) the respondent's use of a minilab for the purpose of processing films and printing photographs in shop 9 is not a breach of clause 6; and; (b) the appellant's grant of a lease dated 31 May 1999 to the second respondent was not a breach of clause 55; and; (ii) the notice given by the appellant to the respondent in respect of its use of a minilab in shop 9 is of no effect.; (b) The appellant by itself its servants and agents is restrained from taking any step to forfeit Lease Registered No. 0313916 by reason of the respondent's use of a minilab for the purpose of processing film and printing photographs in shop 9."; The respondent is ordered to pay the costs of the appeal. No order for the costs of the trial unless an application is made, supported by written submissions, within 7 days. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40676/99 ED 2640/99 PRIESTLEY JA BEAZLEY JA FITZGERALD JA THURSDAY 16 MARCH 2000 GOLDANA INVESTMENTS PTY LTD v AMBERDOWN PTY LTD JUDGMENT 1 PRIESTLEY JA: I agree with Fitzgerald JA. 2 BEAZLEY JA: I agree with Fitzgerald JA. 3 FITZGERALD JA: The appellant is the owner of the Greystanes Shopping Centre. The first respondent is the lessee of shop 9 in that centre and the second respondent has been granted a lease of shop 22 which has not yet been registered. 4 Clauses 6, 54 and 55 of the lease of shop 9 provide: "6 The lessee will not without the consent in writing of the lessor first had and obtained do or permit or suffer to be done any of the following: (a) use the premises or any part thereof otherwise than for a pharmacy including a post office agency and photographic store and processing agency; … 54 The lessor acknowledges that for the purposes of the lease the pharmacy, photographic store and film processing agency shall be conducted by Therese Marie Cooper, Anne Maree McCabe and Robyn Anne Whitehead or their nominee or assignee being a registered Pharmacist and the post office agency shall be conducted by Anne Maree McCabe or her nominee or assignee being a person approved by Australia Post provided however that nothing in this clause shall affect the liability, duties or obligation on the part of the lessee under this lease 55 The lessor shall not during the term hereby granted or during the term granted pursuant to the option contained herein lease any other premises within the Greystanes Shopping Centre for the use permitted hereunder." 5 The trial judge summarised the first respondent's activities in shop 9 in the following passage: "5.1 it has dispensed prescriptions and medicines, sold cough and cold medicines, general medicines, health care equipment, hair shampoo and other hair products, perfumes and make-ups, gifts and promotional items, vitamins and associated products, dental care products, sun glasses and sun care products, eye preparations, contact lens preparations, baby foods, nappies, surgical aids and supports, first aid treatments and wound care products; 5.2 it has operated as a Soul Pattinson agency selling products advertised by Soul Pattinson; 5.3 the post office has been conducted from a separate counter from which site services include the sale of stamps, posting of letters and payment of accounts; and 5.4 the photographic store and film processing has operated from a separate counter. The photographic store has stocked and sold cameras, films, batteries, photo albums, photo frames, passport photos and the processing of films. 6 The manner in which films have been processed has changed over the years. During the period 1988 to 1995 the [first respondent] only offered an overnight service whereby the customer would leave the film with the [first respondent] and it would be sent off-site for developing by a third party. The developed film would then be returned to the [first respondent] for delivery to the customer on return the following day. 7 Since October 1995 the plaintiff has offered an additional service whereby films are developed on site with the use of a minilab which was purchased by the plaintiff in late 1995. The minilab was described in evidence as being just over a metre long by half a metre wide by about 1.2 metres high. There is also a photograph of the minilab in evidence." 6 The lease of shop 22 provides for it to be used for: "Retail sale of cameras and camera accessories (including duty and tax free), frames, albums, batteries, photoprocessing, laser printing, colour copying, instant passport photos, laminating and fax bureau." 7 There are three matters in dispute, namely: (a) whether the first respondent's use of the minilab to process films and print photographs is a breach of clause 6 of the lease of shop 9; (b) whether the appellant's lease of shop 22 to the second respondent is a breach of clause 55 of shop 9; (c) the form of the appropriate relief. 8 Clause 6 of the lease of shop 9 establishes that the permitted use of that shop is not confined to the usual activities of a "pharmacy" but extends also to "a post office agency" and a "photographic store and processing agency". That is consistent with one ordinary use of "including" to enlarge what would otherwise have been comprehended by the use of the premises for a "pharmacy". However, "including" is not in this context synonymous with "and". The primary permitted use of shop 9 is a "pharmacy", and the other activities are permitted as ancillary to that use. 9 By clause 1 of the lease of shop 9, "[w]ords importing the singular number shall include the plural number and vice versa." If that provision has a material operation in relation to clause 55, "use" might be read "uses". However, that is of little significance for present purposes. Clause 6 of the lease of Shop 9 does not permit it to be used as only a "post office agency" and / or a "photographic store and processing agency". A "post office agency" and / or "photographic store and processing agency" is not permitted except in conjunction with a "pharmacy". 10 As the trial judge noted, the word "agency" is apt to describe a "business or organisation established to provide a particular service…". The appellant failed to persuade me that a composite description "photographic store and processing agency" is insufficient to permit the respondent to use the minilab in shop 9 for the processing of films and the printing of photographs, i.e., for on-site "photoprocessing" as it is referred to in the lease of shop 22. The use of the word "agency" does not lead to a conclusion that the respondent is only permitted to receive films on-site on behalf of a principal which processes the films and prints the photographs off-site. 11 The permitted use of shop 9 as a "photographic store and processing agency" is also sufficient to permit the "[r]etail sale of cameras and camera accessories …, frames, albums, batteries", which are another significant part of the activities permitted by the lease of shop 22, and might also permit the "instant passport photos" referred to in the lease of shop 22. 12 There is a substantial overlap between the activities permitted by the lease of shop 9 and the activities permitted by the lease of shop 22. On the other hand, the leases otherwise provide for quite different uses of the two shops: shop 9 as a "pharmacy including a post office agency" and shop 22 for "laser printing, colour copying, … laminating and fax bureau." 13 If the material part of clause 6 was inserted, clause 55 of the lease of shop 9 would provide: "The lessor shall not lease any other premises within the Greystanes Shopping Centre for a pharmacy including a post office agency and photographic store and processing agency." The lease of shop 22 provides for a different use; i.e, broadly speaking, "a photographic shop and processing agency" and for "laser printing, colour copying, … laminating and fax bureau." Shop 22 is not available for use as a "pharmacy". While different minds might reasonably differ, I am satisfied that shop 22 has not been leased for the use permitted for shop 9. 14 Accordingly, I would allow the appeal in part, and set aside the injunction granted by the trial judge restraining registration of the lease of shop 22 and her Honour's order for an inquiry as to the damages sustained by the first respondent by reason of the grant of that lease. 15 The remainder of the appeal should be dismissed. However, the appellant also complained of the form of the orders which the trial judge made to protect the first respondent's use of the minilab in shop 9. Some variations are appropriate to clarify the position. 16 The orders below should be set aside and the following orders made: "(a) The Court declares that: (i) Upon the true construction of Lease Registered No. 0313916: (a) the respondent's use of a minilab for the purpose of processing films and printing photographs in shop 9 is not a breach of clause 6; and (b) the appellant's grant of a lease dated 31 May 1999 to the second respondent was not a breach of clause 55; and (ii) the notice given by the appellant to the respondent in respect of its use of a minilab in shop 9 is of no effect. (b) The appellant by itself its servants and agents is restrained from taking any step to forfeit Lease Registered No. 0313916 by reason of the respondent's use of a minilab for the purpose of processing film and printing photographs in shop 9." 17 Each party succeeded in part and failed in part, both at trial and in this Court. However, the appellant was substantially successful in its appeal. I would order that the respondent pay the costs of the appeal, but make no order for the costs of the trial unless an application is made, supported by written submissions, within 7 days. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.