Jiwunda & Anor v Trustees of the Travel Compensation Fund (No 2) [2006] NSWSC 803

New South Wales Supreme Court

CITATION : Jiwunda & Anor v Trustees of the Travel Compensation Fund (No 2) [2006] NSWSC 803

HEARING DATE(S) : 3 August 2006

JUDGMENT DATE : 3 August 2006

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 08/03/2006

DECISION : Defendants ordered to pay interest at contractual rate; orders as sought by plaintiffs.

CATCHWORDS : CONTRACT – Whether oral agreement made varying terms of agreement for lease – whether defendants obliged to pay interest on cost of making good premises at rate stipulated in lease agreement. - COSTS – INDEMNITY – Whether plaintiffs' Calderbank letter of offer was a genuine offer of compromise.

Jiwunda Pty Ltd – First Plaintiff PARTIES : Terabu Pty Ltd – Second Plaintiff The Trustees of the Travel Compensation Fund – Defendant

FILE NUMBER(S) : SC 2308/04

COUNSEL : S.Y. Reuben – Plaintiffs H. Moss – Defendant

SOLICITORS : Pitcher Walton – Plaintiffs McCabe Terrill – Defendant

1 I delivered my reasons for judgment in this matter on 27 July 2006. I directed that the parties bring in Short Minutes of Order to reflect my reasons for judgment. Today, the parties have argued a number of points which have arisen as to the orders which should be made. These reasons should be read with the reasons for judgment published earlier. Interest on rental arrears

2 The first question is whether outstanding arrears of rent fall within Clause 9.4 of either the lease which expired on 31 March 2001 or of an Agreement for Lease which I have held came into existence on 12 March 2001. If the answer is yes, then arrears of rent will carry interest at the rate provided in Clause 9.4. 3 It seems to me to be clear that Clause 9.4, which was a clause of the lease existing as at 12 March 2001, was incorporated as a term of the Agreement for Lease which came into existence at that date. What happened, so I have held, was that there was an agreement between the parties to grant a new lease in the same terms as would have been the case had the option to renew, which had then expired, been validly exercised by the Defendants. Had the option to renew been validly exercised then, of course, the terms of the prior lease would have been incorporated into the new lease. It seems to me, therefore, that it does not really matter when construing Clause 9.4 whether one says that the arrears of rent are payable under the former lease, that is, the lease that expired on 31 March 2001, or under the lease which came into existence on 12 March 2001, because Clause 9.4 is to be found in both the former lease and the Agreement for Lease. 4 It follows that rental which was not paid pursuant to the Agreement for Lease which came into existence on 12 March 2001 is "outstanding arrears due" under Clause 9.4 of the terms of the Agreement for Lease which came into existence on 12 March 2001. Accordingly, arrears of rent carry interest at the rate stipulated in Clause 9.4. Interest on commission paid to leasing agent