Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2010] NSWSC 29

New South Wales Supreme Court

CITATION : Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2010] NSWSC 29

HEARING DATE(S) : 16/06/08, 17/06/08, 18/06/08, 19/06/08, 20/06/08, 23/06/08, 24/06/08, 25/06/08, 26/06/08, 27/06/08, 30/06/08, 04/07/08, 28/07/08, 29/07/08, 27/08/08, 28/08/08, 24/11/08, 25/11/08, 26/11/08, 27/11/08, 28/11/08, 10/06/09, 11/06/09, 24/08/09, 25/08/09, 26/08/09, 27/08/09 Written submissions: 1 September 2009

JUDGMENT DATE : 5 February 2010

JURISDICTION : Equity Division

JUDGMENT OF : Barrett J

DECISION : First plaintiff not entitled to specific performance by defendant of any contract for sale and purchase of the Cudgen Paddock.

CATCHWORDS : LANDLORD AND TENANT – leases and tenancy agreements – construction and interpretation – option to purchase included in lease – option exercisable within five year term of lease - whether option survives earlier termination of lease – LANDLORD AND TENANT – lessee's covenants – as to permitted use of land – as to existence of necessary consents for permitted use – whether covenants breached – whether breach capable of being remedied - MISTAKE – equitable remedies – rectification – whether lessee's covenant as to permitted use should be rectified for common mistake – ENVIRONMENT AND PLANNING – "existing use" rights – whether establishment of tree plantation permitted on land previously used for cattle grazing and pasture protection - LANDLORD AND TENANT – termination of the tenancy – frustration: application of to leases – whether frustration – re-entry and forfeiture – when right of re-entry becomes enforceable – CONTRACTS – discharge and breach – application of contract principles to leases – where lessee's covenant agreed to be essential term – breach thereof – whether lease terminated for fundamental breach – separateness of right of re-entry and right to terminate contract – Conveyancing Act 1919 s 129(1) relevant to former but not latter - ESTOPPEL – estoppel by convention – whether available in the face of an "entire agreement" clause by reference to pre-contract consensus – whether such consensus existed in fact – ELECTION – principles discussed – whether lessor elected to affirm lease despite lessee's breach of covenant – LANDLORD AND TENANT – relief against forfeiture – principles discussed – whether court should grant relief against forfeiture to lessee – whether lessor's exercise of right to terminate was unconscionable – CONTRACTS – implied terms – term requiring good faith – whether implied – whether any such term can qualify express term making lessee's covenants essential terms – CONTRACTS – implied terms – term requiring co-operation – scope of such term – EQUITY – fraudulent and innocent misrepresentation – alleged misrepresentation by lessee – whether lessor thereby induced to grant lease – causation and reliance – CONVEYANCING – the contract and conditions of sale – terms of contract arising from exercise of option to purchase included in lease – contractual mechanism for determination of price – construction and interpretation - LANDLORD AND TENANT – option to purchase included in lease – implied terms – whether implied term that lessee not entitled to exercise option if in breach of lease covenant – applicability of Conveyancing Act 1919 s 133E to any such implied term – EQUITY – equitable remedies and equitable defences – specific performance – unclean hands – EQUITY – fiduciary obligations – whether fiduciary duties existed – whether such duties breached – knowing involvement in breach – EQUITY – equitable remedies – constructive trust – effect on third party – whether third party with prior equitable interest will be unfairly prejudiced by recognition of constructive trust – whether such prior interest exists - EVIDENCE – where key participants not called to give evidence – available inferences – whether fear of reactivation of criminal charges sufficient explanation