Total Destination Marketing Pty Limited v Horizons Snowy Mountains Pty Limited (formerly Ainline Pty Limited) [2011] NSWSC 1575

Supreme Court New South Wales

Medium Neutral Citation: Total Destination Marketing Pty Limited v Horizons Snowy Mountains Pty Limited (formerly Ainline Pty Limited) [2011] NSWSC 1575 Hearing dates: 15 December 2011 Decision date: 15 December 2011 Jurisdiction: Equity Division Before: Pembroke J Decision: Relief from breach refused Catchwords: LANDLORD AND TENANT - option for renewal - relief against loss of right to renew - operation of Conveyancing Act 1919 s 133F - factors relevant to court's discretion - effect of breach on relationship between lessor and lessee - loss of trust -relationship soured - relief refused Legislation Cited: Conveyancing Act 1919 Cases Cited: Best and Less (Leasing) Pty Ltd v Darin Nominees Pty Ltd (1994) NSW Conv R 55-724 Capital Projects (Qld) Pty Ltd v Trust Company of Australia Limited [2008] 2 Qd R 313 R&J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd (2008) 13 BPR 25, 161 Texts Cited: Peter Butt, Land Law, 6th edition Category: Principal judgment Parties: Total Destination Marketing Pty Limited - plaintiff Horizons Snowy Mountains Pty Limited (formerly Ainline Pty Limited) - defendant Representation: J Darvall - for the plaintiff J A Trebeck - for the defendant Last and Maxwell - for the plaintiff Doyle Edwards Anderson Lawyers Pty Ltd - for the defendant File Number(s): 2011/00248532

ex tempore Judgment

Introduction 1In my decision given on 4 November 2011, [2011] NSWSC 1349, I determined a question of construction of clause 21.5 of the lease between the plaintiff (lessee) and the defendant (lessor). The effect of that decision was that certain breach notices issued by the lessor pursuant to section 133E of the Conveyancing Act 1919 were valid. The primary breach which was the subject of the notices was a breach of the obligation to pay turnover rent. The notices stated, in accordance with section 133E, that subject to any order of the Court under section 133F, the lessor proposed to treat the breach as precluding the lease from entitlement to an option for renewal. The lessee now seeks relief from the consequences of its breach pursuant to section 133F. In other words, notwithstanding that it has no contractual entitlement to do so (because I have concluded that the breach notices are valid), it seeks to invoke the Court's discretion to relieve it from those consequences. If I were to grant the relief which it seeks, this would compel the lessor and lessee to remain in a commercial and contractual relationship as lessor and lessee for a further five years. 2The underlying dispute relates to the contention that the lessee has repeatedly under-declared its "Gross Rooms Revenue" for the purpose of enabling the calculation of turnover rent by the lessor. If all of the figures in contention are accepted, the total revenue that has not been reported by the lessee is $3,460,367. This would result in further turnover rent payable in the sum of $311,433, excluding interest.