Tresoy Pty Limited v Dodoma Holdings Pty Limited & Ors [2004] NSWSC 968

New South Wales Supreme Court

CITATION : Tresoy Pty Limited v Dodoma Holdings Pty Limited & Ors [2004] NSWSC 968 HEARING DATE(S) : 18 October 2004 JUDGMENT DATE : 25 October 2004 JURISDICTION: Common Law Division JUDGMENT OF : Master Malpass at 1 DECISION : The summons is dismissed; the plaintiff is to pay the costs of the summons.

CATCHWORDS : Appeal - option for renewal of lease - was it exercised - error of law or fact - leave - what must be shown for grant of leave. LEGISLATION CITED : Local Court (Civil Claims) Act 1970, s69(2) & (3) Local Courts (Civil Claims) Rules 1988, Pt 13 r 1 Tresoy Pty Limited (Plaintiff) PARTIES : Dodoma Holdings Pty Limited (First Defendant) Bruce Bolam & Rose Florence Bolam (Second Defendant) FILE NUMBER(S) : SC 12241 of 2004 COUNSEL : Mr M Small (Plaintiff) Mr A Vincent (First Defendant) SOLICITORS : Dennis & Co Solicitors (Plaintiff) Hunt & Hunt Lawyers (First Defendant)

LOWER COURT Local Court JURISDICTION : LOWER COURT 187 of 2003 FILE NUMBER(S) : LOWER COURT Hodgson LCM JUDICIAL OFFICER :

- 5 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Master Malpass

25 October 2004

12241 of 2004 Tresoy Pty Limited v Dodoma Holdings Pty Limited & Ors

JUDGMENT 1 Master: The plaintiff (as lessor) and the first defendant (as lessee) entered into a lease for a period of five years from about 15 September 1993. The subject premises were known as 247 Lords Place, Orange (the premises). The lease contained an option for renewal for a further period of five years. 2 The first defendant corresponded with the plaintiff by letter dated 13 June 1998 (the letter). It contained inter alia the following:- We understand that our lease on the above office premises expires on 15th September 1998. I hereby confirm that we wish to exercise our option to renew for a further period and I request a copy of the new lease agreement to be forwarded to me care of our Bathurst Office as soon as a copy could be arranged. We further request that as the new lease period commences that Tresoy Pty Limited agrees to attend to the following matters:- 1) Through no fault of the lessee, water pipes running under the car park had broken. The pipes were repaired, but the driveway was not appropriately repaired and is full of holes and now requires a bitumen reseal. 2) The roof leaks in different areas and has and will continue to cause the following damage unless repaired:- i) water damage to carpet ii) water damage to our external signs iii) water damage to internal and external paintwork We would appreciate your confirmation that the above serious problems will be rectified. 3 Subsequently, the first defendant vacated the premises and ceased paying rent. Security Hardware Pty Limited went into occupation of the premises in August 1998 and paid rent to the plaintiff. It may have acquired the business of the first defendant. A proposed assignment of the lease did not take place. No new lease agreement was executed. On 20 March 2003, the plaintiff leased the premises to Dunkett Enterprises Pty Limited. It was in occupation until after 15 September 2003. 4 There was a shortfall in what was received from Security Hardware Pty Limited and Dunkett Enterprises Pty Limited as rent (as opposed to what would have been payable under the renewed term). The plaintiff brought proceedings in the Local Court at Bathurst. The claim for the shortfall was in the order of about $17,000 plus interest. The claim was defended. A hearing took place on 30 June 2004. 5 The plaintiff recovered a judgment for a small part of its claim ($792.83). No interest was awarded on this sum. 6 A principal question that was argued was whether or not the letter brought about an exercise of the option for renewal. The learned magistrate found that it did not. He accepted the argument advanced on behalf of the first defendant that it was conditional and that no new lease with the first defendant came into being upon the expiration of the original lease. He also found that there had been a repudiation of the lease by the first defendant which had been accepted by the plaintiff. 7 The plaintiff has brought proceedings in this court. In those proceedings, it purports to challenge what was done by the learned magistrate. An amended summons was filed on 7 September 2004. It raises three grounds of appeal as follows:- First Ground That the Court below erred in holding that there was no lease such that this is an error of law within s69(2) of the Local Courts (Civil Claims) Act 1970. Second Ground That the Court below erred in holding that there was no lease such that this involves a question of mixed fact and law within s69(3) of the Local Courts (Civil Claims) Act 1970. Third Ground That the Court below erred in the calculation of interest on the outstanding rent. 8 An appeal as of right lies where there is error in point of law. A challenge by way of leave is available where there is a mixed question of fact and law. The onus rests with the plaintiff to demonstrate error which justifies the disturbing of the decision of the Local Court. 9 I now turn to the content of the letter dated 13 June 1998. As mentioned during submissions, on one view it could be read as not expressing an intention to be a notice of exercise of option. As that argument was not run in the court below, I put it aside. 10 The plaintiff contends that the construction of the letter throws up a question of law. The first defendant sees it as a question of fact. In my view, this dispute does not need to be resolved. I am not satisfied that the finding of the Local Court should be disturbed. 11 I am not satisfied that there was error in the construction of the letter. The finding as to the construction of the letter was supported by material that was before the court. It seems to me, that the learned magistrate was entitled to come to the view that the letter did not constitute written notice of intention to renew the lease for a further term and that no new lease came into being. 12 There was also argument concerning the findings made as to repudiation and acceptance. It seems to me that they can be similarly dealt with. I am not satisfied that these findings should be disturbed. 13 The question of interest was but little argued. It remained unclear as to whether or not this ground was really being pressed. The lack of enthusiasm seemed to arise because a very modest sum only was involved. 14 The claim was for contractual interest. The learned magistrate was given little or no assistance from the plaintiff on the question. The first defendant raised a question concerning Pt 13 r 1 of the Local Courts (Civil Claims) Rules 1988. The transcript is not helpful. 15 In the light of the very small amount that is involved, I am not satisfied that the decision as to interest should be disturbed. 16 There was argument as to whether or not leave was required, and, if so, what needs to be demonstrated to enable a grant of leave. 17 There is authority to suggest that the plaintiff must show more than mere error. The amount in issue is also a relevant consideration. In this case, it seems to me that the amount claimed in the Local Court was insufficient to justify a grant of leave. In some cases, the view has been taken that the question in issue should have a public interest factor. In this case, no such factor is present. 18 Accordingly, if there need be a grant of leave, I am not satisfied that this is a case in which leave should be granted. 19 The summons is dismissed. The plaintiff is to pay the costs of the summons. **********