The Leasing Centre (Aust) Pty Limited v Massey Bailey Services Pty Limited & Ors [2006] NSWSC 53

New South Wales Supreme Court

CITATION : The Leasing Centre (Aust) Pty Limited v Massey Bailey Services Pty Limited & Ors [2006] NSWSC 53

HEARING DATE(S) : 14 February 2006

JUDGMENT DATE : 20 February 2006

JURISDICTION : Common Law Division

JUDGMENT OF : Associate Justice Malpass at 1

DECISION : See paragraphs 23 - 24.

CATCHWORDS : Construction of rental agreement and variation - variation did not extinguish automatic renewal entitlement.

The Leasing Centre (Aust) Pty Limited (Plaintiff) PARTIES : Massey Bailey Services Pty Limited (First Defendant) Daniel John Massey (Second Defendant) Marion Moe Bailey (Third Defendant)

FILE NUMBER(S) : SC 15310/05

COUNSEL : Mr P Taylor SC (Plaintiff) Mr T Bors (Defendants)

SOLICITORS : Swaab Attorneys (Plaintiff) MasseyBailey (Defendants)

LOWER COURT JURISDICTION : Local Court

LOWER COURT FILE NUMBER(S) : 5919/2005

LOWER COURT JUDICIAL OFFICER : O'Shane LCM

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

Associate Justice Malpass

20 February 2006

15310 of 2005 The Leasing Centre (Aust) Pty Limited v Massey Bailey Services Pty Limited & Ors

JUDGMENT 1 His Honour: The plaintiff is engaged in the business of, inter alia, renting equipment. The first defendant carries on a legal practice. 2 These parties (respectively as "owner" and "renter") entered into two rental agreements. One had the number R001924632 and was dated 26 September 2001. The other was numbered R001925770 and dated 21 February 2002. 3 The period of the first agreement was due to expire in September 2004. The period of the second agreement was due to expire in February 2005. 4 Both agreements contained similar terms and conditions including a provision as follows:- 23 renewal This Agreement shall be automatically renewed following the expiration of the initial term for a new term being either the period of the initial term or twelve (12) months whichever is the lesser unless the Renter:- (a) Delivers to the Owner written notice ninety (90) days prior to the expiration of the said initial term; and (b) Delivers at the Renter's expense the Equipment to the Owner in accordance with the provisions of clause 4(l) hereof on or before the expiration of the initial terms of this Agreement. (c) In the event the Renter requests a variation ("Variation") of the Term or of the Equipment rented under this Agreement, the Owner may in its absolute discretion agree to such Variation and forward Acknowledgment of Variation of Rental Agreement to the Renter setting out the details of any such change. Any Variation shall be effective from the date specified therein and shall be binding on the Renter upon signing of the Acknowledgment by the Renter. In the event that a copy of the Acknowledgment signed by the Renter is not received by the Owner within seven (7) days of Acknowledgment, the Owner may elect not to be bound by the Variation. 5 In respect of both agreements, the parties effected a written variation pursuant to (c) thereof. There is no dispute between the parties that its provisions were validly invoked. 6 The variation had the following heading:- ADJUSTMENT NOTE – R001928320 ACKNOWLEDGMENT OF VARIATION