CHOICE SERVICES P/L v. GICUBO P/L [2003] NSWSC 314

Reported Decision : (2004) NSW ConvR 56-082

New South Wales Supreme Court

CITATION : CHOICE SERVICES P/L v. GICUBO P/L [2003] NSWSC 314 HEARING DATE(S) : 03/04/2003 JUDGMENT DATE : 17 April 2003 JURISDICTION: EQUITY JUDGMENT OF : Bryson J at 1 DECISION : No contract of sale, proceedings dismissed [47]

CATCHWORDS : LANDLORD and TENANT - Option and Agreement to Purchase - right of first refusal - whether offer to tenant was made - whether when made it could be withdrawn - decision on terms of lease. LEGISLATION CITED : Conveyancing Act 1919 s.54A Prudential Assurance Co. Ltd v. Health Minders Pty Ltd [1987] 9 NSWLR 673 CASES CITED : State Authorities Superannuation Board v. Australian Safeways Stores Pty Ltd (1988) NSW ConvR 55-423 Dorsman & Anor v. Castagna (1992) NSW ConvR 55-616 PARTIES : Choice Services Pty Limited - Plaintiff Gicubo Pty Limited - Defendant FILE NUMBER(S) : SC 5125 of 2002 COUNSEL : D.H. Murr S.C. - Plaintiff F. Lever S.C. - Defendant SOLICITORS : Nicholas G Pappas & Co. - Plaintiff Dibbs Barker Gosling - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BRYSON J.

THURSDAY 17 APRIL 2003

5125/02 CHOICE SERVICES P/L v. GICUBO P/L JUDGMENT 1 HIS HONOUR: These proceedings arise out of a provision in Lease 6661410N relating to offering to sell the building to the tenant. The lease dated 28 February 2000 between the defendant Gicubo Pty Ltd as lessor and the plaintiff Choice Services Pty Ltd as lessee created a term of three years from 8 October 1999 to 7 October 2002 of dental surgery premises which are part of the building at 323 Sydney Road, Balgowlah; the building is the land in Folio Identifier 5/9335. Doctor Thomas Vui Chung Chai is a director of Choice Services; he carries on a dental practice in the leased premises and is the principal figure in Choice Services. Doctor Denzil Seldon, who also practices as a dentist, is a director of Gicubo and he is the principal figure in its affairs. 2 The lease contains provisions under the clause heading "Right of First Refusal" in cl.F in these terms: If, during the term of this Lease, any holding-over hereunder, extension or renewal thereof the Lessor wishes to sell the building at 323 Sydney Road, Balgowlah ("The Building") in which the premises are situate; (a) The Lessor shall not sell or transfer to any person or corporation without first offering to sell to the Lessee the Building on contract terms and at a price to be notified in writing to the Lessee by the Lessor at which the Lessor desires to sell the same and if, within 21 days from the receipt of such offer of sale, the Lessee in writing advises the Lessor that he accepts the offer, then the Lessor shall sell the Building to the Lessee at such price and on such contract terms; (b) In the event that the Lessee wishes to purchase the building but does not agree with the Lessor that the price notified by the Lessor in writing pursuant to the notice referred to in (a) above is the true market value of the Building, the Lessor agrees that the purchase price in the offer will be amended to the mean figure of three valuations ("the valuations") as to the market value of the building submitted to the Lessor by the Lessee within 21 days from the receipt of the Lessor's offer referred to in (a) above. The valuations will be carried out by three (3) independent Real Estate Valuers nominated at the request of the Lessee by the President for the time being of the Australian Institute of Valuers Inc. (NSW) (or should that institute cease to exist the President or other principal officer for the time being of such body or association as serve substantially the same objects as that Institute) and each Valuer shall be a full member of the Australian Institute of Valuers Inc. (NSW) of not less than five (5) years standing and shall hold a licence to practise as a Valuer of the kind and premises demised by this Lease. The fees and costs of the said Valuers in providing the valuations will be paid by the Lessee; (c) If the Lessee does not accept the Lessor's offer within the said twenty-one (21) days closing at 4.00pm on the 21st day, the Lessee will be deemed to have rejected the offer allowing the Lessor to sell or transfer the Building to any other person or corporation without notice to the Lessee on what other terms the Lessor may wish; (d) This right of first refusal is a once only right and expires for all time after the first offer of sale from the Lessor to the Lessee. 3 The lease incorporated Memorandum W418497, in which cl.1.4 provides: Clause headings are intended only to facilitate the reading of this document and shall be of absolutely no effect whatsoever in relation to the interpretation of this Lease or of any of the covenants expressed or implied herein.