Macrocom v City West Centre [2001] NSWSC 374

Reported Decision : (2001) 10 BPR 18, 631 [2001] NSWSC 374

New South Wales Supreme Court

CITATION : Macrocom v City West Centre [2001] NSWSC 374 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 5160 of 2000 HEARING DATE(S) : 9 April 2001 JUDGMENT DATE : 9 May 2001

PARTIES : Macrocom Pty Limited (Plaintiff) City West Centre Pty Limited (Defendant) JUDGMENT OF : Windeyer J at 1

COUNSEL : Mr G A Sirtes (Plaintiff) Mr R Horsley (Defendant) SOLICITORS : Henry Davis York (Plaintiff) Peter Cornelius & Partners (Defendant) CATCHWORDS : LANDLORD AND TENANT - termination on tenant being placed in liquidation - whether satellite dish and technical equipment fixtures, tenant's fixtures or chattels Australian Provident Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700 Holland v Hodgson (1872) LR 7 CP 328 CASES CITED : Lee v Gaskell [1876] 1 QB 700 N H Dunn Pty Ltd v L M Ericsson Pty Ltd (1979) 2 BPR 9241 National Australia Bank Ltd v Blacker [2000] FCA 1458 Sanwa Australia Leasing Ltd v National Westminster Finance Australia (1989) NSW ConvR 55-437 DECISION : See paragraph 28

16 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WINDEYER J

WEDNESDAY 9 MAY 2001

5168/00 MACROCOM PTY LIMITED V CITY WEST CENTRE PTY LIMITED

JUDGMENT

Issue 1 The question for decision is whether certain equipment in a building of the defendant has become part of the building as a fixture and therefore part of the land, or whether that equipment comprises chattels. Facts 2 The defendant, City West Centre Pty Limited (City West) is the owner of a property known as 55 Pyrmont Bridge Road, Pyrmont. A purpose built building is constructed on that property for high technology communications purposes, for use as a telecommunications hub with particular features necessary for this. 3 On the roof of the building are certain satellite dishes, antennae and other transmitting and receiving equipment. Beneath the roof is a floor known as the "link hut". This houses special electronic equipment linking to the antennae. The floors beneath the link hut are leased to various tenants. Those floors house other equipment, generally processing equipment, which is connected to the link hut equipment by cable. 4 By lease dated 30 January 2000, City West leased to a company Planetel Pty Limited (Planetel) part of level one in the building for a term of seven years, commencing on 1 February 2000, with an option to renew for a further seven years. The lease defined infrastructure space as follows: "Infrastructure Space" means electrical, mechanical and storage areas in the ground floor car park area, basement or on the roof of the Building and as shall have been so identified by the Lessor and Lessee and agreed upon as constituting Infrastructure Space . 5 The lease also included the following clauses: 7.5 (a) The Lessor may require the Lessee at the expiration or earlier determination of the term of this lease to remove from the Demised Premises any or all alterations and additions made to the Demised Premises by or on behalf of the Lessee and all partitions, equipment fittings, fixtures, machinery and other belongings installed or placed in the Demised Premises by or on behalf of the Lessee and in that event the Lessee must do so and must make good all damage and disfigurement (apart from fair wear and tear) caused to the Demised Premises as may have been affected by any such installation alteration or addition or by the removal thereof and where the term of this Lease shall be determined prior to the termination date specified the Lessee shall effect such removal reinstatement and making good of damage within a reasonable time after such determination (b) The Lessee may at or prior to the expiration of the term of this lease remove from the Demised Premises any or all equipment fittings fixtures machinery and other Lessee's belongings installed or placed in the Demised Premises by or on behalf of the Lessee and in the nature of trade or tenant's fixtures provided the Lessee can do so without causing damage or disfigurement to the Demised Premises or with the consent of the Lessor provided the Lessee makes good all damage and disfigurement caused to the Demised Premises and if required by the Lessor lodges a bond or other acceptable security in respect thereof and pays the Lessor's costs of supervision of such removal. (c) If the Lessee shall not have completed such removal reinstatement and making good at the expiration of the term of this Lease (or in the case of the early determination of the term of this Lease within a reasonable time after such determination) then without affecting any other right of the Lessor , the Lessor may remove and store such partitions, alterations, additions, equipment, fittings, fixtures, machinery and other belongings as the Lessee shall have failed to remove and may reinstate and make good the Demised Premises and the Lessee shall pay on demand all costs and expenses incurred by the Lessor including but not limited to shipping and storage costs in so doing and the Lessor may alternatively elect not to effect or only in part to effect such removal reinstatement and making good in which case such partitions, fixtures, machinery and other belongings as have not be removed by the Lessee shall be treated as having been abandoned by the Lessee and forfeited to the Lessor . None of the Lessee's partitions, alternations, additions, equipment, fittings, fixtures, machinery and other belongings shall be treated as abandoned until after a period of ninety (90) days has expired from the expiration of the term of this Lease. … 18.1 In addition to the rent and other payments under this lease, the Lessee must pay to the Lessor an amount calculated at the rate of $250.00 per square metre plus GST as an allowance for the use of Infrastructure Space as identified and determined by agreement. The infrastructure rate of $250.00 per square metre is to be reviewed on the same date as the rent and in the same manner as the rent is determined in accordance with clause 4.3 of the Lease. Clause 4.3 shall apply mutatis mutandis. 6 The evidence is somewhat contradictory and uncertain, but it appears Planetel was placed under administration in October 2000 and under creditors' voluntary liquidation on 21 November 2000. Messrs. Sherman and Walker were appointed first as administrators and then as liquidators. It also seems to have been accepted that as a result of the administration, City West exercised its rights to terminate the lease, although how that was done was not established. 7 Macrocom Pty Limited (Macrocom) had been involved with Planetel over the design of its satellite system at Pyrmont. Macrocom is a wholesale telecommunications carrier. It provided services to Planetel and installed most of the equipment the subject of this action in the Pyrmont premises. After Planetel went into administration Macrocom purchased the equipment the subject of these proceedings from the administrators under an agreement which, although it recited Planetel was owner of the equipment, included a provision that neither the company nor the administrators gave any representation or warranty as to ownership of the assets or the right to sell them. Under the agreement the equipment is said to be encompassed in the first box of the following description of equipment sold and purchased under the sale agreement: 4.6 m Intelsat Satellite Dish, Relevant Anchoring Equipment to Roof: Cross Axis Waveguide Kit, Lightning Rod Kit etc (located at Building C 100 Bulwara Road, Pyrmont 65,000.00 Equipment located at: 190 City Road, South Melbourne; 530 Collins Street, Melbourne; Pitt Street, Sydney 90,000.00 4 communications racks removed from the Brisbane and Melbourne premises of the company @ $500 each 2,000.00 "Supernova" Techware PII 128Mb Ram, 8 GB HDD, CD Rom and Tape Drive 1,300.00 "Latex.Planet.net.au" Paragon P120 64 Mb Ram, 850 Mb HDD, Serial No. 116214 250.00 "Archie" Tecs Computer PII 256Mb Ram, 3 x 4 GB HDD, Serial No. B94248R 1,600.00