Lugarno Petroleum Pty Limited v Gabriel Shimess [2008] NSWSC 983

New South Wales Supreme Court

CITATION : Lugarno Petroleum Pty Limited v Gabriel Shimess [2008] NSWSC 983

HEARING DATE(S) : 25 August 2008, 26 August 2008 JUDGMENT OF : McDougall J at 1

EX TEMPORE JUDGMENT DATE : 26 August 2008

DECISION : See paragraph [76] of the judgment.

CATCHWORDS : EQUITY - rectification - whether mistaken belief as to terms of written lease - whether inconsistent with alleged prior oral agreement - rectification - rescission.

CASES CITED : Australasian Performing Right Association Limited v Austarama Television Pty Ltd [1972] 2 NSWLR 467 Hooker Town Developments Pty Ltd v The Director of War Service Homes (1973) 47 ALJR 320

Lugarno Petroleum Pty Limited (Plaintiff) PARTIES : Gabriel Shimess (First Defendant) Samir Shimess (Second Defendant)

FILE NUMBER(S) : SC 50078/07

COUNSEL : A G Rogers (Plaintiff) C W Robinson (Defendant)

SOLICITORS : Kheir & Associates (Plaintiff) James Lahood & Associates (Defendant)

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

McDOUGALL J

26 August 2008 ex tempore (revised 28 August 2008)

50078/07 LUGARNO PETROLEUM PTY LIMITED v GABRIEL SHIMESS JUDGMENT 1 HIS HONOUR: The plaintiff is the proprietor of land and improvements at Lugarno. The improvements are, or include, a service station and a mechanical workshop. The workshop is and for many years has been used by the defendants for carrying on their business known as GSS Mechanical Services. There is a lease of the workshop from the plaintiff to the defendants. It commenced on 1 September 2006. The initial term is three years, but there are three options for further three year terms. 2 The rent reserved by the lease is $1,000 per month, or $12,000 per annum. In addition, the defendants are to pay 40 percent of certain outgoings. The rent is subject to review in accordance with movements in the Consumer Price Index. 3 The plaintiff's case is that the reference to a rent of $12,000 per annum is mistaken. The plaintiff says that the true rent was agreed at $1,000 per week, or $52,000 per annum, again with outgoings and subject to adjustment. (I should note that all the figures that I am quoting are exclusive of GST.) Alternatively, the plaintiff says, it executed the lease on the basis of a mistake as to the rental stated in it. It says that the defendants unconscientiously took advantage of this mistake. 4 On one basis, the plaintiff seeks rectification of the lease. On the other, it seeks rescission. In each case, there are prayers for ancillary relief.