New Dragon Investments Pty Ltd v Morgan & Banks Development Pty Ltd [2006] NSWSC 1139

New South Wales Supreme Court

CITATION : New Dragon Investments Pty Ltd v Morgan & Banks Development Pty Ltd [2006] NSWSC 1139

HEARING DATE(S) : 27 October 2006

JUDGMENT DATE : 30 October 2006

JURISDICTION : Equity Division Duty List

JUDGMENT OF : Brereton J

DECISION : Application for interim injunction to restrain re-entry by lessor refused.

CATCHWORDS : INJUNCTIONS – Interlocutory injunctions – to restrain re-entry by lessor – where lessor had first converted lease to monthly tenancy and subsequently given one month's notice – where lessee had delayed for six months in approaching Court – where lessor had agreed to suspend lessee's monetary obligations pending feasibility study – where no evidence that feasibility study not completed - whether seriously arguable case of agreement or estoppel that suspension of lessee's monetary obligations continued – where no evidence of attempt or intent or ability to remedy breaches - whether seriously arguable case for relief against forfeiture – interim relief refused.

LEGISLATION CITED : (NSW) Conveyancing Act 1919, s 129

CASES CITED : Pakwood Transport Ltd v 15 Beauchamp Place Ltd (1977) 36 P & CR 112.

PARTIES : New Dragon Investments Pty Ltd (plaintiff) Morgan & Banks Development Pty Ltd (defendants)

FILE NUMBER(S) : SC 5534/06

COUNSEL : Mr K Pierce (plaintiff) Mr S Kerr & Mr P Kulevski (defendant)

SOLICITORS : Leitch Hasson Dent (plaintiff) Bartier Perry (defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY LIST

BRERETON J

Monday 30 October 2006

5534/06 New Dragon Investments Pty Ltd v Morgan & Banks Developments Pty Ltd JUDGMENT 1 HIS HONOUR: The applicant New Dragon Investments Pty Ltd is the lessee and the respondent Morgan and Banks Developments Pty Ltd is the lessor of premises formerly known as the Club Watersports Building at 136-150 Dry Dock Road, Tweed Heads South, under lease registered number AB389317 for a term of 22 years commencing from 1 October 2004. On 22 March 2006, Morgan & Banks' solicitors Bartier Perry gave New Dragon notice of breaches of three of the lessee's covenants, and also that it was in arrears of rent. On 1 May 2006, Bartier Perry gave New Dragon notice that by reason of those alleged breaches remaining unremedied, the lease was terminated and converted into a monthly tenancy. On 26 September 2006, Bartier Perry gave New Dragon notice that the monthly tenancy was terminated with effect from one calendar month after service of the notice, and requiring that New Dragon remove its property from the premises and return the keys by that time. During the afternoon of 26 October 2006 – the day on which the notice to quit expired – New Dragon approached the court ex parte with an application for an injunction restraining Morgan & Banks from taking possession of, and from excluding it from, the premises. When the hearing of the application resumed on Friday 27 October, counsel appeared on behalf of Morgan & Banks, and the matter proceeded as an opposed application for an interim injunction. At the conclusion of the hearing on 27 October, I indicated that I would not grant interim relief; these are my reasons for that decision which, because of the significant potential consequences for the parties, are more elaborate than would ordinarily be appropriate in the circumstances.